Jigyasa Singh | Managing Director | Technology | Accenture Africa | mail me |
Insurance is a mature and historically stable industry, operating on established, reliable business strategies and methods. However, when digital technology really began to take hold with consumers, it upended traditional insurance models.
According to the new study by Accenture (NYSE: ACN), the good news is that the same technology disrupting insurers can be used to grow their business, ensuring relevance and the personalised insurance experience consumers want.
Our bi-annual study of insurance consumers reveals how attitudes and behaviours are shifting, and point toward actions insurers can take. We are exploring new models of doing business that capitalise on the benefits technology can bring while meeting a changing set of consumer demands.
If insurance companies proactively rethink their business strategy along these vectors they have an opportunity to get closer to their consumers at a time when many show increased willingness to consider alternative providers and methods of purchasing insurance.
A uniform ‘indemnity model’ isn’t enough and our research makes it clear that consumers now expect more help from their insurance provider. As such our study details three areas of action that can help ensure they get it.
Action 1: Accommodating varying generational appetites for digital services
Digital capabilities are now essential for insurers, connecting them to an increasingly digital consumer. COVID-19 accelerated the transition to digital in 2020 across all demographic groups, but clear differences in generational appetites for digital offers emerged.
Millennial and younger consumers (18 – 34) express greater interest in digital offerings that help them make safer, healthier, and more sustainable choices. For example, 61% of Millennial and younger consumers say they would be interested in home cybersecurity insurance where premiums are tied to using the latest virus protection software, while only 42% of those aged 55+ say the same.
Sustainability represents a win-win for insurers and Millennial and younger consumers. Our survey shows that younger segments want digital experiences that encourage sustainable travel and shopping practices. More than two-thirds of Millennial and younger consumers (67%) consider such help appealing. This presents an opportunity for a double benefit in achieving sustainability target.
Action 2: Offering consumers quid pro quo – value for data
Consumers say they are more willing to offer personal data in exchange for more personalised pricing, offers, and discounts. They are increasingly demanding to be charged based on behaviour and habits and they’re willing to allow insurers to collect and use their data in exchange for that value, and will only share data for incentives.
Our study shows consumer willingness to share data in exchange for enhanced value in health-related insurance products, such as life, long-term care, and disability. Approximately 69% of consumers say they would share significant data on their health, exercise and driving habits in exchange for lower prices, an increase of 19% from two years ago.
Global health and wellness company Vitality and its parent company, Discovery, won two Efma-Accenture Innovation in Insurance awards in 2020 for their pioneering shared-value business model, which has been scaled globally to 25 markets with over 20 million members. The program guides and rewards better health behaviour and has been adopted by leading insurance organisations around the world, with the aim of making people healthier. The right partners can help the insurer reach new customers with personalised offers based on behavioural data and analytics.
Whether the insurer is the platform owner or the platform partner, a customer-centric experience can help drive revenue and maximise customer lifetime value.
Action 3: Restoring trust – the delicate balance between human and digital interaction
Despite consumer willingness to share data in exchange for personalisation and value, their level of trust is down.
Just under 32% of consumers say they put a lot of trust in their insurers to look after their data, and this is not surprising, as we’ve seen the number of cyberattacks against insurers double in the past two years. Accenture says that although successful data breaches in the insurance industry are down 42% since 2018, insurers face both an increasing cyber threat and a consumer trust problem.
The study also reveals that beyond data breaches, 38% of consumers say they are reluctant to give up personal data because they consider it too intrusive, up from 25% two years ago. This may be less about insurers and their trustworthiness and more to do with consumers’ growing concerns about maintaining control of their data. The result is a consumer in conflict. Despite a growing concern about data privacy and security, the consumer wants personalised pricing and service but is increasingly reluctant to share data in order to get it.
Achieving the right balance between digital and human interaction makes a difference.
What matters to your insurance customer?
It is important to realise that insurance is an emotional purchase, and a 360-degree view of each customer needs to be available so next-best-actions and suggestions are on target. That can only be provided through comprehensive, integrated front and back office digital capabilities. A digitally enabled human provides the best of both worlds and can help grow customer trust.
According to Accenture, insurers can harness technology disruption to better connect with consumers for positive business impact. New models of doing business that capitalise on how technology helps insurers meet changing consumer demands are essential. Focusing on the insurance lines where your business has competitive advantage and investing strategically in digital capabilities to meet the needs of key generational segments.
Delivering in a digital world, on-demand, while achieving that critical balance between human touch and the ease of technology is both art and science. Every day our team helps insurers retain their relevance in consumers’ lives and position themselves for growth in this new risk landscape.
Accenture’s Global Insurance Consumer Study 2021, was conducted across 28 global markets with 47,810 respondents.
