New York — The latest study from New York-based Simon-Kucher & Partners, "Managerial Perspectives: Time for a Change! How Insurers Waste Profits due to Lack of Market Excellence," questioned 1,500 insurance executives in the United States about the management perspectives considered to be most important as well as those most frequently used in the industry. 

“Insurance executives are becoming increasingly aware of how important an in-depth understanding of end-customer needs is,” wrote Dirk Schmidt-Gallas, partner and head of insurance at Simon-Kucher & Partners, a global consulting company specializing in strategy, marketing and pricing. “The results of our study underline what we have been observing in many projects worldwide: Although the customer perspective is perceived as most important, only few insurers are using customer-driven management methods. This is a clear sign of lacking capability.”

More than 80% of the executives rated the customer perspective as the most important management angle, leaving internal (primarily cost-related) and competitive perspectives behind. However, cost-oriented management methods are still dominating the industry landscape. More than 95% of the insurers surveyed relied on cost-oriented data for management decisions, and close to 60% use competitive information frequently. Sophisticated and powerful customer-oriented methods—e.g. conjoint measurement, Kano-analysis—that have been proven to create valuable insights for managerial decisions in many other industries are not yet frequently used.

“The lacking market excellence of the industry opens up great opportunities for individual players”, says Daniel Loskamp, project manager and consultant at Simon-Kucher & Partners. “The first insurers that institutionalize the customer-perspectives into their daily management decisions will reap a significant first mover advantage.”

Customer insights such as utility values of product features, price-elasticities and the customer’s willingness to pay for certain products are a key insight for the whole industry value chain—from innovation management to product design, pricing and sales optimization. Thus, incorporating the customer perspective into management decisions can be a crucial step towards profitable growth.

Source: Simon-Kucher & Partners

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