Ernst & Young Survey: Consumers Demand Personalized Service From Insurers

U.S. insurance consumers want their insurers to offer more personalized service and reward customer loyalty, according to Ernst & Young’s Global Consumer Insurance Survey 2012.

The survey also finds that consumers of life/annuity and property/casualty policies are willing to buy multiple products from the same carrier if they are tailored to meet their individual needs, and that Millennials believe the strength and health of an insurer’s brand is more important than the price of the insurance product.

Ernst & Young surveyed more than 24,000 consumers of insurance products in 23 countries across seven global regions, making this body of research one of the largest surveys of consumer attitudes about the insurance industry ever conducted.

“We designed this survey to be far-reaching, to touch across geographies and demographics, and as a way to help insurers contend with one of their biggest challenges: anticipating their customers’ needs and devising ways to serve them more effectively,” says David Hollander, Ernst & Young’s Global Insurance Advisory Leader. “This survey uncovers valuable insights into consumers’ perceptions that we think all insurers – in the U.S. and abroad – can use to change how they sell, service and market to consumers across multiple products lines.”

The most important trends Ernst & Young found focus on U.S. consumers’ expectations of loyalty, customer service and online communications. Specifically, the three themes of critical significance to life/annuity and property/casualty insurers today are:

• Consumers to insurers: know me, reward me

While U.S. consumers continue to be satisfied with their insurance provider, many express a desire for better service and more loyalty rewards.

The good news is that U.S. customers want to remain loyal to their insurers. In fact, 65 percent of respondents are either “not at all likely” or “not very likely” to change insurers in the next five years. In addition, consumers are receptive to targeted cross-sell offers if the product meets their needs and the process is convenient. More than half are interested in buying more than one product from the same provider, although just 11 percent said they have actually done so.

“This is the best time for insurers to make key investments in data analytics, predictive modeling and service-related technology that will help identify product leads and develop tailored messaging and personalized offers for existing consumers,” Hollander says. “With consumers claiming they are open to being sold new products when the time is right, insurers need the technology and systems in place today to manage their sales efforts across a large customer base.”

• Personal interactions coupled with digital ease

Consumers are becoming more comfortable with online channels for researching insurance products and carriers, but the vast majority of people still want to rely on personal interaction to make their insurance purchases. On the property/casualty side, the survey found that personal interaction is particularly important when extending coverage (71 percent), making a claim (82 percent), or dealing with other customer service issues (78 percent). Consumers often feel that insurance products are too complicated, and that they need expert assistance when making important decisions.

Nevertheless, customers are showing a greater desire to use online sources to inform themselves prior to making a purchase with two-thirds expecting to do more independent online research in the future.

As a result, insurers should integrate online and offline channels to deliver a seamless set of customer interactions, according to Ernst & Young. Insurers should also allow consumers to choose the communication method that suits them at any time and to switch between channels without repeating part of a transaction.

• Millennials put a premium on brand when buying insurance

U.S. insurance consumers generally trust their insurance providers, despite the recent financial crisis, which has battered confidence in other financial service sectors, but require them to offer more personalized service and reward customer loyalty, according to the survey.

Specifically, Millennials are bucking conventional wisdom and paying more attention to brand than cost when picking an insurer. While price is still an important factor, consumers younger than 34 are willing to pay more for a brand they trust. In fact, in property/casualty 43 percent of Millennials consider the financial stability of the insurance provider as the most important factor influencing their decision to buy insurance.

“The bottom line is that building a strong brand through new online and offline channels will have a positive impact on sales, especially among Millennials,” Hollander says. “Insurers should define how their brand will be delivered to customers and design all processes to consistently deliver on that promise.”