Would your customers rather buy insurance from Google?
Customers would rather buy insurance from the likes of Google or Amazon than insurers, according to new research.
Around 67% of 6,135 respondents in Accenture’s survey said they would consider purchasing insurance products from organisations other than insurers, including 23% who would consider buying from online service providers such as Google and Amazon.
Of the respondents, from 11 countries, up to 43% of respondents, who could select multiple responses, said they would consider buying insurance from banks, almost one-quarter (23%) from online service providers, 20% from home service providers, such as telecommunication or home security companies, 14% from retailers and 12% from car dealers.
Michael Lyman, Accenture’s global managing director for management consulting, said the survey results foreshadow a period of growing competition within the industry. Lyman even estimated that up to $400bn in insurance premiums could switch over from traditional carriers to organisations like Internet and phone service titans.
“Competition in the insurance industry could quickly intensify as consumers become open to buying insurance not only from traditional competitors such as banks, but also from Internet giants,” Lyman said. “Overall, there is a significant switching risk.”
The trends aren’t just driven by a desire for innovation in the insurance industry, however. Accenture noted that lack of loyalty to one insurer was a key part of customers’ willingness to trust non-traditional organizations with their risk management needs.
In fact, 40% of customers indicated they were likely to switch to another insurance provider within the next year—particularly for home and auto insurance. Customers in the life insurance market were marginally more satisfied, with 35% indicating they would take out a new contract with a different provider in the next 12 months.
However, that trend doesn’t have to spell customer loss for traditional insurers. Lyman noted that of those customers planning to switch insurers, 80% said more personalized service was the top reason they were jumping switch.
That’s an area traditional insurers could use to their advantage—and one producers should keep in mind while comparing plans and carriers for clients.
“The switching economy represents a huge opportunity for many insurers to gain market share,” Lyman said. “Personalisation clearly emerges as a key driver in retaining existing customers and attracting new ones. Innovation in pricing strategy and the ability to make their customers feel that they are unique are thus critical to capturing share within the switching economy.”