Despite inevitable ramifications from the Royal Commission, it seems Australian consumers haven’t completely lost trust in their insurers – particularly when it comes to personal data.
Accenture’s global Financial Services Consumer Study found that 79% of Australian consumers trust their main insurance provider with their data – and 39% would be willing to share even more personal information in order to receive a personalised product or service.
Christian Erickson, a managing director in Accenture’s insurance practice, said this finding suggests there may be scope for insurers to be harvesting and using data in different ways.
“There is certainly an opportunity for Australian insurers to collect and analyse a broader range of data, and, equally importantly, to be clear and transparent with consumers about how exactly this is used and the value or benefits they are receiving in return,” said Erickson.
“There are a number of great examples of how some insurers in other markets are creating new business models and opportunities off the back of data-driven strategies and hyper-personalisation – some well publicised examples in the US market include Toggle and Lemonade.”
Erickson also told Insurance Business that the recent Accenture study should make for welcome reading by insurers – as long as they also respond to concerns.
“It’s clear from the survey that consumers in Australia do trust their insurers, so they are starting from a position of strength,” said Erickson. “However, there are broader, ongoing concerns around data security across all industries, and so insurers must communicate the security parameters that are in place to safeguard their customers’ data, and bolster their investment in data infrastructure and cyber security.”
Marianne Hutchinson, Accenture’s insurance lead for Australia and New Zealand, agreed the survey suggested there may be some opportunities for insurers to better use data – but said they often encountered difficulties in communicating this to customers.
“Often, insurers find that the power of consumer data is in ‘big data’ – that is, the insights and patterns they can draw from analysing a huge and anonymised data-set,” she said. “This is harder to explain to consumers, but should go some way to reassuring consumers who feel that microscopically-tailored, individual pricing is too intrusive.”
Hutchinson also told Insurance Business that when primary carriers do leverage big data to their advantage, they don’t just see business benefits, they also pass on those benefits to customers.
“Insurers that focus on the use of data can generate significant value for their organisation by exploring unique and innovative ways to better serve their customers, creating more compelling customer experiences (through the utilisation of insights generated through data), developing new products and offerings, participating in partnerships and ecosystems, and finding other ways to monetise data,” she said.
Interestingly, the same Accenture survey found that Indonesian customers were far more likely to offer up additional information in exchange for personalised service, with 75% saying they’d be willing to share more data. So, what makes the two customer bases so different?
“Indonesia is an interesting comparison because the financial services sector is in a very different space to Australia’s,” said Hutchinson.
“It’s a young market, with many consumers who are hungry for innovation and willing to experiment in order to get it, especially as their economy grows and whole new customer segments emerge with the need for insurance products.”
Hutchinson says that, as the Australian market is in a more mature place, local insurers have a fairly clear set of propositions which consumers, in broad terms, understand and are comfortable with.
“The challenge for our insurers is how to innovate and bring new ideas to a market that may not be overtly clamouring for it, but will nonetheless respond if the offer is compelling enough,” she says.