The Insurance Purchase Decision - US - August 2017
"Insurance is not a product consumers particularly like to buy, and they don’t typically switch companies once they have purchased what they need. Insurers need to find new customers where possible, often among young people or those who are entering a new lifestage. Once they get a new customer, interactions between customer and insurer will be infrequent, so it is important for insurers to find ways to develop an ongoing relationship with customers outside of transactions. Being available to customers via all channels digital and human will also be a key factor in success."
- Robyn Kaiserman, Senior Financial Services Analyst
While most consumers prefer to have their policies with the same company – and want to renew automatically – more than half also believe it is important to shop around. That means that they are amenable to switching if there is a compelling enough reason to do so. For this reason, insurers cannot assume that consumers’ preference to have all policies with one company will translate to a final decision to remain at their current company. Insurers need to be proactive at the time of renewal, reminding their customers why they remain the preferred choice.
Even among young customers, who are most likely to conduct as much business online or via mobile device as possible, online and mobile insurance tools are not used when they can be. Part of this is the reliance many consumers place on having a personal relationship with an insurance agent, making it perhaps less likely that they would use digital tools instead of calling someone they trust. Another issue with mobile apps in particular, however, is that consumers don’t need to interact with the insurance companies very often, so downloading a little-used mobile app onto their phone isn’t really necessary. To encourage consumers to download their apps, insurers need to think about ways to expand their utility so consumers want or need to use them more often, making them more useful in consumers’ day-to-day lives than just as ways to enroll in a plan or submit a claim
This Report looks at the following areas:
- Differentiation is a challenge
- Most prefer to use one insurance company – but still want to shop around
- Online and mobile tools are still underused
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