A recent IBM study of 21,000 consumers in 20 countries across the world - determined that shopping and buying patterns for insurance are shifting, and that insurance companies must embrace multiple channel strategies to reach consumers. The study recommends that insurers augment their traditional sales strategies to incorporate social media and analytics techniques.
According to the report - the largest global insurance study ever undertaken by the IBM Institute of Business Value - more than 60% of consumers indicated that they are planning to use more than one interaction point -- such as phone, website or face-to-face meetings -- to purchase insurance policies. One-fifth of the respondents said 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 was personal contact with an agent (47.9%), peer groups like friends and family (46.4%), and websites of aggregators or independent comparison providers (35.5%).
“Our findings show that the customer of the future is diverse and multi-modal. Consumers prefer interaction point choices. They can and will switch insurers if their preferred interaction points are not available,” says Primo 'Dondi' B. Aguas, who leads Sales for Insurance, General Business under IBM ASEAN. “Simply put, insurance has shifted from a sellers’ to a buyers’ market.”
The report advises insurers to 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.
Insurers should also 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.
Another recommendation is to improve interaction quality. The report notes that 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.
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.
The study also found that consumers in Malaysia had the highest level of trust in the insurance industry and loyalty to their insurers, as compared to consumers in other countries surveyed. Generally the relationship between trust and loyalty is more pronounced in the emerging markets than in the industrialized economies.
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