A new study is out from Ernst & Young that offers some interesting insight into what people want from insurance companies. And it also questions some of the conventional wisdom that we’ve been taking for granted.
The survey polled 24,000 respondents across 23 countries, with a separate report on results from Americas. One major theme in the report is the role of the online services.
The conventional wisdom is that the use of Internet resources is growing fast and that in the future, online will be the dominant channel for insurance – not only for research, but also for transactions. But E&Y’s American report found that customers do not want to sacrifice a personal touch for the sake of more online services. While online is an important part of the future, it is just one component of an integrated channel management, the report says.
According to the survey, customers clearly voiced a desire for simultaneously improving online access — while continuing with personal contact when it matters. For example, customers said they want personal contact during critical phases of the product life cycle, particularly when extending coverage, making a claim, or dealing with other customer service issues.
The survey also found that the U.S. lags behind both Europe and Asia-Pacific when it comes to the actual percentage of people who purchase insurance through online channels: 7 percent in the Americas versus 14 percent in both Europe and Asia-Pacific.
The survey also noted that price is an important component of value, but as pricing converges through greater information availability, other factors such as brand and product features become also important. It’s not just about price, the report said: you have to build your brand and provide world-class customer service too. The survey showed that across the Americas, price was the key driver in purchasing decisions for 58 percent of people, followed by well-known or trustworthy brand, holding another product from the same insurer and track record or reputation.
The survey also challenges the conventional wisdom about the claims experience. It’s often assumed that if providers offer a good claims experience, customers will be delighted and this will drive loyalty and help build brand value. But the E&Y survey puts a new spin on this. It found that a good claims experience is now expected, and that a bad experience diminishes brand value.
E&Y said a very clear and consistent picture emerged around claims. Excellent claims service is expected and will not, in itself, drive loyalty or customer retention. Nowadays, customers expect great service as a matter of course and the fact that they have received it will not stop them from shopping around. Conversely, a poor claims service is likely to drive customers to switch providers.
The report says insurers can boost retention by having an effective strategy that segments the customer base — and targeting those who are most valuable (and likely to switch) and communicating with them proactively.