Capturing the insurance customer of tomorrow

Three key questions to guide success
Capturing the insurance
customer of tomorrow

Copyright © 2015 Accenture All rights reserved. 2
Today’s insurance customer
More empowered More social Higher
expectations
Significantly different
buying habits

Impact of new customer profile
Accenture Research
Loyalty has declined
Likelihood of switching providers has risen
Huge switching economy has emerged
• Only 29% of customers highly satisfied with providers
• Only 15% sure to buy more from incumbent providers
• $470 billion of personal-lines life and P&C premiums
in play worldwide in 2014

Winners in the new switching economy
Companies that exploit digital technologies and convert innovation into:
Customer insight Mass personalization Hyperscale
Interconnectedness Operational efficiency Agility

Stark choice for insurers
Embrace digital
technology and
customer-centricity
Move out of
distribution to focus on
manufacturing
Maintain the status
quo—the least likely
option to succeed

Formidable challenges lie ahead
Three key questions can guide insurers to success as they adapt to changing
customers, an evolving competitive landscape and transformative technologies:
How far and how fast
should they proceed to
customer-centricity?
What does it take
to become a
Digital Transformer?
What role can they play
in a larger service
ecosystem?
Q.1 Q.2 Q.3

7
QUESTION 1:
HOW FAR AND HOW FAST SHOULD INSURERS
PROCEED TO CUSTOMER-CENTRICITY?

How far and how fast should insurers
proceed to customer-centricity?
of P&C insurance customers believe most
carriers’ products and services are the same
Q.1
A 7% increase in one year
Helps explain why price is the main reason customers switch
carriers
48% included pricing in top three reasons they switch
21%
Value for money ranked second
38% included it in top three reasons they switch

Digital Transformers—a minority of insurers—
put customers at the center of their business
Q.1
Only 56% of Digital Followers have taken the same measures
82% of Digital Transformers:
– Invest in digital channels & technology for customer-centricity
– Provide tailored offerings

Most carriers know they need to improve:
Q.1
• Look at partnering with companies outside the insurance industry
• Form or join an ecosystem
• Offer a broader range of products & services
• Customer understanding & segmentation
• Tailored propositions to various segments
• Strength of their multi-channel capabilities
To provide what customers value they should:

proceed to customer-centricity?Q.1
But only 27% of consumers have a high estimation
of insurers’ trustworthiness
• Build customer trust by:
– Providing added value
– Communicating regularly

12
QUESTION 2:
WHAT DOES IT TAKE TO BECOME
A DIGITAL TRANSFORMER?

What does it take to become a Digital Transformer?Q.2
ANSWER:
A holistic approach to digital
transformation that looks:
• Beyond insurance
• Outside of the enterprise

23%
47%
15%
of customers would buy insurance online
want more online interactions with insurers
Are satisfied with their provider’s digital experience

83%
59%
57%
of insurers believe digital technologies will
transform their customer interactions
expect challenges from online service providers
expect challenges from aggregators

What does it take to become a digital transformer?Q.2
The sweet spot
where customer
and business
value intersect
Where Digital
Transformers
focus their
digital
investments

Three characteristics of a Digital Transformer
VIEW DIGITAL TECHNOLOGY AS A CATALYST FOR TRANSFORMATION
• Not only for doing the same things better
• An avenue to new sources of customer value
CREATE DIGITAL VALUE PROPOSITIONS
• Often part of a larger ecosystem
• Used to strengthen various relationships
ESTABLISH A HOLISTIC BUSINESS STRATEGY
• Digital strategy spans the insurance value chain
• All digital technology explored to emulate successful online giants

18
QUESTION 3:
What role can you play in a larger
service ecosystem?

service ecosystem?Q.3
Create an
ecosystem?
-OR-
Take a supporting
role?
Insurer is better placed to
secure a leading role for itself
A supporting role in an
established, stronger ecosystem
might yield better results for the
insurer and its customers
But the more sophisticated an insurer’s digital capabilities are,
the stronger its position will be in any ecosystem

• 49% of P&C customers worldwide purchased coverage online
– 41% used mobile devices
• 59% of emerging-market customers purchased online
– 69% used mobile devices
• 72% of insurers have formed or plan a new distribution
partnership soon
Three factors reinforce an insurer’s ecosystem role
1. Improving distribution capabilities

• Create customized offerings
• Provide seamless, omni-channel marketing, sales & service
experiences
• Tie it all together with digital technology
• 61% of insurers exploring possibilities within an ecosystem
2. Offering adjacent non-insurance products & services

• A skilled insurance workforce, aware of customer needs,
drives satisfaction
• Digital technology already meets simple customer needs
• The bar is higher for meeting more complex customer needs
• 43% of insurers have acquired or plan acquisitions to build
new digital capabilities
3. Introducing new skills

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Capturing the insurance customer of tomorrow

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