Top 10 insights from customer behavior and loyalty in insurance 2023 survey

According to a recent report "Customer Behavior and Loyalty in Insurance: Global Edition 2023" by Bain & Company, the insurance industry is facing a dramatic shift in customer loyalty and behavior. The report presents insights from a survey conducted with over 128,765 consumers in 14 countries and found some surprising results:

80% of respondents want insurers to embed environmental, social, and corporate governance (ESG) initiatives into their proposition.

It turns out customers now value insurers who embed environmental, social, and governance (ESG) initiatives into their business model. This trend signifies a marked departure from the traditional transactional relationship between insurers and consumers to one that is more purpose-driven and value-based.

Moreover, 59% globally want life insurers to reward them for healthy living.

The report also highlights a growing interest among consumers for risk-prevention services offered by insurers, indicating a shift towards proactive rather than reactive measures. Moreover, consumers are increasingly willing to share data from connected devices with their insurers, opening up new avenues for personalized and efficient service delivery.

However, it appears that most insurers are falling short of these evolving customer expectations. The report highlights a paradigm shift in the insurance sector, reflecting a move towards risk prevention and the demand for better digital interactions. Here are the key points discussed in the report:

Shift to risk prevention

Traditional insurance, which mainly provides financial coverage for risks, isn't meeting customer expectations entirely. Consumers are now looking for insurers to help in reducing or even preventing risks concerning their home, car, health, and financial wellness.

This shift is motivated by recent challenges like extreme weather events, the Covid-19 pandemic, and technological disruptions which have changed the risk landscape.

Insurers are seen to be in an identity crisis, having to move from merely reimbursing damages to encouraging behaviors and providing solutions that will reduce risks.

Some insurers have started offering risk-reduction services, like health apps for coaching, telematics for automotive coverage, and online health and parenting forums for young families.

Purpose-driven consumer behavior

Consumers are becoming increasingly purpose-driven, with 80% wanting insurers to embed Environmental, Social, and Corporate Governance (ESG) initiatives into their propositions. Moreover, 59% of respondents globally want life insurers to reward them for healthy living.

The report suggests that delivering more value in these aspects can boost both customer loyalty and revenue growth for insurers.

Digital interaction

The need for streamlined and easy-to-use digital channels for simple insurance transactions has been amplified, especially due to the pandemic.

Although digital adoption has risen, the report notes a slow adoption of digital self-serve tools due to their failure rates in transactions, causing frustration among consumers.

There's a preference for a human-digital combination for more complex interactions like filing claims or seeking advice, indicating the need for insurers to improve digital self-service while retaining human interaction for complex issues.

New roles for agents

As digital channels improve, the role of insurance agents is evolving with a shift from a "push" to a "pull" model, where advanced analytics and digital tools are used to address customers' needs at the right moments.

Effective working ways are expected to change dramatically, with agents spending less time on low-value tasks and more on building relationships primed by data-informed analysis.

Practical solutions
For insurers to effectively adapt to these emerging trends, it's crucial to implement practical solutions.

In terms of purpose-driven consumer behavior, companies might consider investing more in ESG initiatives and wellness programs to attract consumers. One crucial area is phasing out inefficient and paper-reliant processes.
Insurance and banking are two of the most paper-intensive industries. On average, the insurance origination process requires 8.2 sheets of paper per customer.
Digitizing customer data intake is crucial for insurers to keep pace with the digital economy and offer a better user experience.

Moreover, improving paperless communication channels can reduce administrative costs significantly, saving time on manual processing. This leads to more efficient customer service and improved data security.

For improving digital interaction, insurers can focus on enhancing user experience, making digital tools more intuitive, reliable, and easy to navigate. A customer support team should be available to assist with complex transactions or enquiries.

As for the changing roles of agents, insurers can leverage advanced analytics and digital tools to ensure their agents spend more time building customer relationships and less time on low-value tasks. This might include the use of CRM systems, predictive analytics, and AI-driven insights to provide tailored, timely service to customers.

By prioritizing practical solutions, insurers can effectively navigate the evolving digital landscape and meet the changing needs of customers. Overall, it's clear that the insurance industry is experiencing significant disruption due to advancements in technology and evolving consumer behaviors. To remain competitive in this ever-changing landscape, insurers must be willing to adapt and embrace new technologies while staying focused on meeting the needs and expectations of their customers.

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