Ipsos Loyalty - General Insurance Loyalty Report - Australia 2011
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Ipsos Loyalty - General Insurance Loyalty Report - Australia 2011

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2011 study conducted by Ipsos Loyalty looking at customer loyalty in the General Insurance industry in Australia.

2011 study conducted by Ipsos Loyalty looking at customer loyalty in the General Insurance industry in Australia.

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    Ipsos Loyalty - General Insurance Loyalty Report - Australia 2011 Ipsos Loyalty - General Insurance Loyalty Report - Australia 2011 Presentation Transcript

    • Ipsos LoyaltyIndustry Reports - 2011General Insurance – Australia
    • What is your customerretention & growth strategy?The persistence of smaller, online, budget insurers and What do I need to do toweakened consumer confidence post-GFC has maintained a acquire more customers?soft insurance market for several years. The increasing ACQUISITIONnumber of insurance comparison websites has further added Customer Shareto the commoditisation of general insurance. If decisions are How do I get my current customersmade by counting the number of boxes that are ticked how to use me for more of their banking Retention of Wallet products & services?can we influence consumer choices and create loyal SHARE OF WALLETcustomers ?The Natural Disaster Insurance Review, including the ongoing debate Aquisition What do I need to do keeparound compulsory flood cover, and pressure to provide clearer and the customers I have?simpler policy documentation is adding further challenges and CUSTOMER RETENTIONpotential costs for the industry as insurers seek to provide good coverat a price consumers are willing to pay. It can be a fine balancing act We have some ideas. In early 2011 we spoke to 1,000 Australiansbetween protecting consumers who take out insurance and keeping about their experiences in insurance with the specific goal ofinsurance affordable to avoid increasing the numbers of consumers understanding what was driving their behaviour.who are either underinsuring or not insuring themselves at all Why did they choose their insurance company? Why are they loyal to their insurance company? Where are the opportunities to growWhat will this translate to? Improved cover and more informed your business with existing customers?consumer decisions? Increased competition in car insurance? What follows are highlights of our findings.Pressure on insurers to reduce costs of delivering services and focuson online channels? Only time will tell.Despite the current challenges within the industry thefundamentalsquestions remain the same:
    • Results in 30 seconds! The key findings you need to take away are: A. For insurance, price is a top of mind consideration but customers also continue to rely on experiences and reputations when choosing their main insurance company B. Top 4 banks lead on share of wallet but trail on almost every other loyalty and satisfaction measure Why did you choose your main Key loyalty measures – Where does A insurer? B your brand sit? Price 60% All insurers AAMI NRMA Allianz GIOPrevious experience with the brand 36% Reputation of the company 36% Quality of products and services 27% It was convenient at the time 25% Loyalty Index Brand preference Likely to stay Recent trend in Experiences and reputation are spend key attractors
    • Results in 30 seconds! The key findings you need to take away are: C. NRMA has a high proportion of high value and high loyalty customers making retention a critical issue to protect and grow profits D. Normative data can provide crucial contextual information but how do you know if you’re performing well? And if you’re leading the pack locally how do you know if you’re stacking up internationally? How does the Australia insurance industry C Are your valuable customers at risk? D compare to the rest of the world? Low value low loyalty Low value high loyalty BRAND High value low loyalty High value high loyalty SATISFACTION PREFERENCEAll insurers AAMI NRMA Allianz GIO AUSTRALIA ARGENTINA CHINA FRANCE MEXICO
    • The healthy glow of competitionHigh levels of loyalty will deliver higher retention, however, we also need to understand how loyalty is distributedacross high and low profit customer segments and how loyalty drivers may vary between the two groups.This will enable you to tailor marketing strategies to build loyalty while maximising the return to your bottom line. All insurers AAMI NRMA Allianz GIO Loyalty Index Brand preference Likely to stay Recent trend in spend Share of insurance products
    • Strong competition from ‘challenger’ brands…We all know that price and products are important and our analyses confirmed this. But what is really interesting iswhat else is coming together for customers to make them feel that extra bit of loyalty to their insurance company?After the basics, the most important drivers of loyalty are those things you do to make life easier for your customersand make them feel valued – ease of signing up and renewing their policies, resolving their problems, efficiency inprocessing their claims and rewarding their loyalty. Overall customer service Loyalty/rewards scheme Staff knowledge All Insurers AAMI (n=181) Efficiency in processing claims Friendliness NRMA (n=153) Allianz (n=62) Overall claims handling Resolve issue GIO (N=51) Clarity of policies Complaints handling Competitive premiums Ease getting in touch Relevance of policies Range of policies Ease of renewing Ease of signing up
    • Where are the opportunities for growth?Sometimes your customer retention & growth strategy isn’t about getting new or keeping existing customersFor many companies the major gains from their customer growth strategy will come from getting their currentcustomers to give them a greater share of their insurance wallet.Car and home insurance are the backbone of the consumer GI business. While there is a high incidence ofconsolidation there is still some opportunity to build share of wallet through home to motor and motor to homecross-sell campaigns.Growth opportunities also exist in developing offers in the area of Life, Car breakdown and Income insurance. 90% Car insurance 78% Around 13% of 75% car insurance Home insurance and 14% of 64% home 39% insurance Health insurance policy holders 5% are leaking to 23% other Life insurance providers 5% Opportunity to 21% grow revenue Car breakdown insurance through 10% offering new 11% products Income insurance 2% 6% Travel insurance % with product 1% 2% % with main insurer Pet insurance 0%
    • How many products is enough?Customers with 3 or more products are significantly more favourable towards their main insurer in the areas ofcustomer service, being easy to deal with and product factors, key drivers of loyalty.These findings suggest that these drivers could be strengthened and leveraged to support acquisition and retentionstrategies. Overall customer service All Insurers Loyalty/rewards scheme Staff knowledge 1 product Efficiency in processing 2 products Friendliness 3+ products claims Overall claims handling Resolve issue Clarity of policies Complaints handling Competitive premiums Ease getting in touch Relevance of policies Range of policies Ease of renewing Ease of signing up
    • Adding customer value to the mix– what do you really stand to gain or lose?Insurance is one of the few industries where more customers does not always deliver more profits – adisproportionate amount of revenues and profits can come from a small but extremely valuable segment ofcustomers. This is why it is crucial to add a customer value to the mix. NRMA has a significantly larger proportion of profitable loyal customers. Strategically, insurers should look to protect their high value but vulnerable customers through embedding them with multi-policy and other loyalty offers. Low value low loyalty Low value high loyalty Value & Loyalty Map – All Banks High value low loyalty High value high loyalty 35 37 35 33 31 32 31High Value Low Loyalty High value High 29 29 28 27 28Customers Loyalty 24 23 Segment size : 31% Segment size : 19% 20 19 15Low Value Low Loyalty Low Value High Loyalty 12Customers Customers 7 6 Segment size : 22% Segment size : 28% Loyalty Index All insurers AAMI NRMA Allianz GIO 9
    • What’s the norm? Normative data can provide crucial contextual information – price always rises to the top for consideration and service delivery rates high when looking at retention. How do you know if you’re performing well? And if you’re leading the pack locally how do you know if you’re stacking up internationally? LOYALTY INDEX BRAND PREFERENCE SATISFACTION RECOMMENDATIONAustralia’s scores arerepresented by the bluedotted line and all other 11 11scores are relative toAustralia. 8 6 4 1 1 -1 -3 -4 -4 -4 -6 -9 French insurance customers Insurance customers in are less satisfied with their Mexico are much more main insurer when likely to recommend -14 compared to Australian their main insurer when -17 insurance customers. compared to Australian insurance customers. AUSTRALIA ARGENTINA CHINA FRANCE MEXICO
    • What’s behind the Ipsos Loyalty Index?Ipsos surveyed 10,000 customers of different brands in different sectors; and surveyed them againa year on. The variables that best predicted Loyalty were used to create the Ipsos Loyalty Index.Loyalty, from our research and experience, is about attitudes AND behaviour and it is the combinationof both of these in the Loyalty Index that provides the extra predictive validity above and beyondsingle item measures. Customer Attitudes + Behaviour = Loyalty Prediction of 12 month churn Brand preference 73% 68% ATTITUDINAL 60% LOYALTY 55% 57% 49% 51% Likelihood to stay 44% Loyalty Index BEHAVIOURAL Share of business LOYALTY Recent spending All industries Banking Likelihood to recommend (NPS) Likelihood to continue Satisfaction Loyalty Index
    • About the researchWe surveyed 1,000 Australians and asked them a series of questions aimed atunderstanding what was driving their behaviour towards their main insurer. Questionsincluded:• What insurance companies do you currently have a relationship with?• What insurance company do you consider to be your main insurer?• What insurance products do you currently own?• What insurance products do you currently own with your main insurer?• How well is your main insurer performing across categories like customer service, having quality products and claims process?We analyzed this information to answer questions like:• What is the relationship between customer advocacy and new customer acquisition?• What are the key drivers of customer retention?• Where are the opportunities for insurance companies to grow their share of their customers insurance spend?
    • Let us know if we can help!Brett Tucker | Managing Director, Ipsos Loyaltybrett.tucker@ipsos.com +61 2 9900 5130 - officeJulie Harris | Director, Ipsos Loyaltyjulie.harris@ipsos.com +61 2 9900 5191 - office