Customer Behaviour and Loyalty in Insurance: Global Edition 2023
This is a great report from Bain. You can click on the link below to get the full report.
We have provided a summary here of the main points from the report, highlighting factors impacting customer behaviour, loyalty, and strategies to drive growth and retention.
Introductions
Consumers are no longer solely interested in insurance as a means of covering losses; they now seek insurers’ assistance in reducing and preventing the various risks that affect their lives. These risks primarily pertain to their homes, cars, health, and financial stability. This shift in consumer preference has been exacerbated by the increasing turbulence and uncertainty of recent years, including extreme weather events, the COVID-19 pandemic, ageing populations, and technological disruptions. These factors have reshaped the risk landscape, necessitating insurance companies to redefine their role.
Rather than merely reimbursing losses, insurers are facing an identity crisis and are urged to take a more active role in encouraging behaviours and providing solutions that mitigate risks.
The insurance industry is expected to pivot towards a central purpose of offering risk solutions in the next decade, much like their previous efforts to promote seat belts in cars and safety standards in house construction.
Consumer attitudes have also become more purpose-driven, extending beyond risk prevention. A survey by Bain & Company, involving 28,765 consumers across 14 countries, reveals that 80% of respondents desire insurers to incorporate environmental, social, and corporate governance (ESG) initiatives into their offerings.
Furthermore, 59% globally expect life insurers to reward them for maintaining a healthy lifestyle. In essence, consumers are seeking insurance providers who not only protect them financially but also contribute to their well-being and address broader societal concerns.
The Shift in Customer Expectations
Insurers need to recognise that customers now expect a seamless and personalised experience across various touchpoints. This report emphasises the importance of adopting digital channels and leveraging data analytics to gain customer insights and deliver tailored offerings. Embracing technology can help insurers enhance customer satisfaction and loyalty.
The insurance industry is expected to pivot towards a central purpose of offering risk solutions in the next decade, much like their previous efforts to promote seat belts in cars and safety standards in house construction.
The Rise of Ecosystems
The emergence of ecosystems presents both opportunities and challenges for insurers. By partnering with other industries, such as healthcare or the auto industry, insurers can offer more comprehensive coverage and personalised services. However, insurers must carefully navigate these partnerships to ensure they add value and meet customer needs effectively.
The Power of Trust and Transparency
Building trust is essential in the insurance industry. Customers are more likely to stay loyal to insurers who prioritise transparency, clear communication, and fair pricing. Providing easily understandable policy terms, simplifying claims processes, and offering proactive support boost customer satisfaction and loyalty.
Personalisation and Customisation
Insurers should leverage customer data to create personalised offerings that address individual needs. Advanced analytics and artificial intelligence enable insurers to segment customers effectively and provide relevant recommendations, leading to higher customer loyalty and engagement.
The Role of Digitalisation
Digital transformation is key to meeting customer expectations and driving growth. Insurers should invest in user-friendly digital platforms, enabling customers to interact seamlessly and access services anytime, anywhere. Digital tools, such as mobile apps, chatbots, and online claim processing, enhance convenience and improve overall customer experience.
Customer Engagement and Retention
The report emphasises the need for insurers to focus on customer retention rather than just acquisition. By providing exceptional customer service, actively engaging with customers, and offering loyalty programs, insurers can foster long-term relationships and reduce churn.
Insurers should invest in user-friendly digital platforms, enabling customers to interact seamlessly and access services anytime, anywhere. Digital tools, such as mobile apps, chatbots, and online claim processing, enhance convenience and improve overall customer experience.
Maximising Data Analytics
Harnessing the power of data analytics allows insurers to gain valuable insights into customer behaviour and preferences. By leveraging advanced analytics, insurers can identify trends, anticipate customer needs, and offer personalised recommendations. This data-driven approach enhances customer satisfaction, increases cross-selling opportunities, and improves overall business performance.