Diversified channels

According to new IBM study of more than 3,000 property and casualty insurance policyholders, less than half say their provider informs them about new products and services.

Additionally, only 43 percent of policyholders contend their insurance company tailors policies to meet their specific needs.

The study, “Surviving climate change in the property and casualty industry by growing customer advocacy,” also suggests a widening gap between insurance customer demographics, product offerings and distribution channels.

Younger policyholders are increasingly price sensitive and technology-savvy, and are more likely than others to access a variety of distribution channels including the Internet, mobile text and instant messaging.

Baby boomers are described as accustomed to more traditional insurance channels yet willing to explore price options on the Internet. This tendency among Boomers will redefine the market, forcing insurance companies to develop tailored products that can be offered across multiple channels.

“Insurance providers can no longer follow the ‘one-size-fits-all’ approach to product offerings and channel distribution and expect to remain competitive,” concludes Bill Busby, partner, IBM’s Global Business Services, Americas Insurance Leader.

“Younger customers want fast and easy transactions with little or no human interaction, while older customers continue to value a high touch experience and demand higher levels of service and quality. Meanwhile, customers across the board want their providers to offer more flexible products and deliver a greater degree of personalized service.”

The study claims that insurers must diversify their products and their distribution channels to meet the needs of both Baby Boomers and younger consumers. Of course, you wouldn’t expect a study from IBM to say technology is over-rated, now would you?

The study doesn’t differentiate among consumers based on how they now buy their insurance. If you polled divorced couples who met via online dating services, they might have a very different view of relationships than couples who met in school, at work or through friends or relatives.

We suspect that many of these dissatisfied consumers whose policies don’t fit and whose providers don’t keep them informed are policyholders who are not using independent agents.