Today’s insurance customer is less married to the concept of seeking insurance from a traditional carrier than they were 10 years ago.
According to a new report from management consulting group Accenture, more than two-thirds of policyholders would consider purchasing insurance products from organizations like Amazon, Verizon or Google, including 23% who would buy from online service providers, 20% from home service providers, 14% from retailers and 12% from car dealers.
Accenture surveyed more than 6,000 policyholders in 11 countries to come up with the figures.
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 organizations 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. “Personalization 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.”