The modern-day searching and buying patterns used by consumer for insurance are shifting, and insurance companies cannot rely on traditional channel strategies to reach them, according to a study released by IBM today.
More than 60% of 21,000 consumers polled in IBM’s global survey indicated that they are planning to use more than one interaction point, such as phone, Website or face-to-face meeting, to purchase their insurance policies. One-fifth of the respondents shared they use more than four different interaction points to search and compare their insurance options.
Consumers selected online channels (49.5%) as their top preference for information gathering purposes to search for insurance. Following close behind, personal contact with an agent (47.9%) and peer groups like friends and family (46.4%). While mobile shopping is emerging into a rising global trend, IBM’s survey surprisingly revealed that only 1% of consumers say they use their smart phones to search for insurance.
Ancillary information from Forrester Group’s October 2010 report found that social mobile browsing is growing at 90%, while social mobile application usage is growing at 90%.
Regarding the consumer’s preferred channel for purchasing insurance, the ranking order of online and personal interaction points is reversed: personal interaction points are overwhelmingly preferred at 31.5%, with the insurer’s website a distant third at 16.8%.
Over the last twenty years, insurance providers relied on conventional channel strategy development to target consumers. The vast majority of insurers rely on standard demographics for segmentation analysis. IBM’s analysis shows that demographics offer limited insight when predicting interaction point preference. The challenge today’s insurers face is to provide quality service and reach customers with the right interaction mix.
Other Key Findings Include:
* Consumers with low trust in the insurance industry are almost 20% more likely to switch their providers.
* Personal interaction points have high conversion rates from inquiry to purchase: when consumers receive information from a person, 80% of them stick with the person for the actual purchase
* Areas for improvement: consumers are looking for a good selection of products and helpful advice to boost satisfaction levels.
“Our findings shows that the customer of the future is diverse and multi-modal,” said Christian Bieck, IBM IBV global insurance leader. “Consumers prefer interaction point choices ¬ and consumers can and will switch insurers if their preferred interaction points are not available. Insurance has shifted from a sellers’ to a buyers’ market.”
The report also analyzes areas and tactics that insurers can employ to improve strategies for customer interaction and satisfaction.
Top Recommendations include:
* Increase the number of available interaction points: As consumers want to use multiple touch points, insurers should make it easy for customers to search and purchase insurance products beyond personal interactions ¬ employing print, social media and smartphone channels. These interactions should be branded consistently, present identical information, and allow users to switch interaction points without losing information provided at other points of contact.
Follow your customers and use analytics: Insurers should study the data of insurance search and purchase decisions and employ them effectively. They should also engage consumers actively to reveal data about their preferences so that can develop customized strategies based on personal experience. The use of customer analytics can reveal valuable behavioral data that will allow insurers to compare interaction point offerings to the preferred mix of targeted customers.
* Improve Interaction quality: Customers are demanding good advice, a wide range of customized products and offerings and fast and efficient service. To reverse the declining loyalty trend, insurers must focus on perfecting its interaction quality so that they can turn consumers into advocates of its business.
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Corrected December 14, 2010 at 10:58AM: yes