With digital technology now transforming the economy with breathtaking speed, companies that once considered their turf safe from encroachment by competitors are now having to rethink traditional business models. Perhaps nowhere is this more urgent than in the insurance space — a sector whose corporate practices have changed little over the decades.
The stakes are huge: According to a new report from Accenture, as much as $470 billion in life insurance and property & casualty insurance premiums are in play. The chief reasons are: plummeting customer loyalty and a perception among potential buyers that that they’re buying commoditized products.
For insurers, the new report, “Capturing the Insurance Customer of Tomorrow,” should serve as a wake-up call, in part because of the impressive amount of data gathered. The survey’s sobering findings are based on interviews with more than 13,000 P&C and life insurance customers across 33 countries.
The research reveals that less than one-third (29 percent) of insurance customers are satisfied with their current providers. Also, sure to raise eyebrows, is the percentage of customers who view the products and services of insurance carriers as essentially the same jumped to 21 percent in 2015 from 14 percent in a similar survey last year.
Additionally, less than one in six customers (16 percent) say they would definitely buy more products from their current carrier. Only one in four (27 percent) has a “high estimation” of their insurance providers’ trustworthiness. And nearly one in four (23 percent) say they would consider buying insurance from online service providers, including technology giants like Amazon, Apple and Google.
“Today’s insurance customer is more empowered, more social and has higher expectations of his/her providers,” says John Cusano, senior managing director of Accenture’s global insurance practice. “The study data indicates insurers are not keeping up with rising customer expectations, leading to increased customer dissatisfaction with insurance providers.
“This has created a ‘switching economy,’ which threatens traditional insurers by giving the advantage to companies most successful at exploiting digital technologies,” he adds.