Insurer Misses Selling Deeper

As connected insurance takes center stage, a new Bain & Company survey of more than 164,000 consumers in 19 countries,  finds that upwards of 70 percent of respondents said they would value a platform for providing services well beyond just insurance coverage. This finding suggests property & casualty (P&C) and life insurers have an untapped opportunity to generate sales of additional products and transform from sellers into solutions providers, helping to boost the industry's traditionally low rates of customer engagement and loyalty.

According to Bain's second biennial insurance loyalty study, conducted with Research Now, about 50-80 percent of customers view their primary insurers as potential platform providers for other insurance products, such as vehicle anti-theft services, home monitoring services, health advice and even estate planning. In most countries surveyed, more than 70 percent of consumers said they are willing to share personal, health or other data with insurers to gain access to insurers' additional offerings. Carriers that are able to capitalize on this willingness stand to further strengthen their relationship with customers.

"Insurance executives know that improving the long-term economics of the business will require interacting more and delivering more value to customers," said Henrik Naujoks, who leads Bain's Financial Services Practice in Europe, the Middle East and Africa and co-authored the report. "Our new research sheds light on how various customer segments perceive their P&C and life carriers, what customers want from their carriers and how they behave, and how different distribution and interaction channels influence loyalty."

In addition to offering a more encompassing suite of services, Bain found that frequent interactions with consumers contribute to loyalty in both the P&C and life sectors, though the level of contribution varies. China, Indonesia and Malaysia experience high levels of engagement, while France and Spain are much lower.

"Customers are looking for insurers to provide more than just claims management," said Andrew Schwedel, a senior member of Bain's Financial Services practice and one of the report's co-authors. "The carriers who will win in this new consumer-led environment are those who can create an ecosystem of value added services -- everything from monitoring driving behavior to making recommendations for a fitness plan -- that connect more closely to their customers' needs."

Fintechs and online aggregators have upped the competition for traditional insurers in this way by creating more direct interactions with providers via digital channels. As a result, consumers have come to expect easy, fast, convenient websites and mobile apps. Bain's research shows one-third to two-thirds of customers use digital channels when purchasing a P&C product. China, Brazil and Mexico have seen the greatest growth in digital usage, while mobile usage is coming on strong across much of Asia.

While current digital tools have the potential to help insurers connect with customers faster and with more precision, few have been able to design digital tools that meet these expectations -- an industry impediment Bain addressed in its 2015 Global Digital Insurance Benchmarking Report. This survey found fewer than 50 percent of P&C providers and 35 percent of life carriers track any customer buying signals using digital technologies, suggesting that insurers need to ramp up their digital capabilities and presence.

"Mobile offers huge potential to create satisfied insurance customers, but companies have to get it right to reap huge benefits in terms of customer loyalty and retention," said Harshveer Singh, a partner in Bain's Financial Services practice in Asia-Pacific and a co-author of the report. "Customers want more than just a flashy tool. In our research, some of the best apps are those that also excel at the basics -- accuracy, reliability and ease of use."

The study also advises that amid the wave of digital adoption, insurers cannot afford lose their 'human touch.' Across nearly every market surveyed, customers increasingly use a hybrid mix of channels -- digital, phone and in-person -- to interact with their carrier. From 2014 to 2016, the share of P&C customers using multiple channels has increased in China, Singapore, the U.S., and Spain.