The ‘Switching’ Economy

New global research finds that as many as two-thirds (67 percent) of insurance customers would consider purchasing insurance products from organizations other than insurers, including 23 percent who would consider buying from online service providers such as Google and Amazon.

The research by Accenture, which is based on a survey of more than 6,000 insurance customers in 11 countries, found that 43 percent of respondents, who could select multiple responses, said they would consider buying insurance from banks, almost one-quarter (23 percent) from online service providers, 20 percent from home service providers, such as telecommunication or home security companies, 14 percent from retailers and 12 percent from car dealers.

“Competition in the insurance industry could quickly intensify as consumers become open to buying insurance not only from traditional competitors such as banks but also from Internet giants,” said Michael Lyman, global managing director for management consulting within Accenture’s Insurance industry practice.

He said that overall there is a “significant switching risk” and it is possible that up to $400 billion in insurance premiums could change hands within the insurance industry over the next 12 months.

The research shows that loyalty in insurance is a key issue, with 40 percent of consumers likely to switch to another automobile or home insurance provider over the next 12 months.

Lower prices and more personalized service are the top reasons for consumers to switch to a new insurer.

Forty-one percent of respondents said they were willing to pay more to get personalized advice when purchasing their insurance.

The research also reveals that two-thirds (67 percent) of consumers are interested in mobile insurance services – such as sending pictures of their car to report a claim, or displaying their proof of insurance on their mobile phone – while less than half (46 percent) of the respondents that are mobile device owners have already used their tablets, and 37 percent their smartphones, to deal with their insurers.

Also according to the survey, more than one-third (35 percent) of insurance customers are open to providing access to their usage or behavior information – such as car-usage or lifestyle information – if this can give them better value for their insurance coverage.

“Visionary insurers must also be prepared to conceptualize their business more broadly, building online communities and offering non-insurance services and be willing to create ecosystems of partners who together can provide the total, personalized and convenient experience today’s customers expect,” said Lymann.

Accenture commissioned a survey of 6,135 owners of life and/or auto and home insurance policies in 11 countries. The online survey was designed by Accenture and conducted by Lightspeed Research in July 2013.