Recent research by PwC concluded that traditional insurers face a growing threat of losing out to new players as customers turn increasingly to the internet for their insurance. The study involved nearly 10,000 people in 16 countries and revealed that 86% of UK adults do some on-line research before buying insurance and that 50% of policies are bought on line.
In this fast moving digital age, the same tired ways to market just will not work. Insurers need to engage customers with speed and personalisation. Customers instinctively want to be able to select and buy the most suitable product for their own personal circumstances. The UK has great insurance products, so new product design is not a priority. Instead, the answer lies in improving engagement and loyalty by offering better ways for customers to understand the choices already available.
And what about after a sale? Is initial purchase just the start of the relationship? If you see customer-advocacy as one of the keys to success, then customer-retention is critical. Loyal customers spend money and are happy to recommend the products that they buy. Too often we see all the focus on attracting new customers through the front door, while existing customers are tumbling out at the back, dissatisfied with bad service. In this digital age – where everyone has a voice that can echo for a long time on social media, blogs, and feedback pages – perhaps looking after existing customers is becoming more essential than ever.
The research from PwC shows that on-line business continues to grow, with an increasing number of consumers preferring to make their own purchases. The winners will be the providers that can a) help customers to understand value instead of price alone, and b) improve their multi-channel and multi-product customer experience to win more business from the same customer.
There are huge opportunities, but anyone who can’t meet the changing demands of the consumer will lose out. If traditional insurers fail to improve their technology and approach, new entrants who understand these demands will erode their market share.
Put simply, insurers need to help consumers to better understand the huge choice of financial products on offer; they need every potential customer to appreciate the value of the products that he or she is looking at. Perhaps most importantly, insurers need to make it easy for customers to buy, with confidence, the specific products that suit their personal needs. And the story shouldn’t stop there – insurers need to apply the same focus to post-sale strategy. A customer can be a customer for life.