Capturing hearts, minds and market share

How connected insurers are improving customer retention

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Involve customers rationally and emotionally

With a profusion of information and insurance options available, it seems harder than ever for insurers to reach and keep today’s empowered customers. While traditional insurance distribution channels still work, they are not enough to secure trust and lasting relationships. What other instruments do insurers need? Based on a survey of 12,000 consumers in 24 countries, our latest insurance study shows that three ingredients are indispensable in capturing hearts, minds and market share: customer knowledge, customer value and customer engagement.

Insurers currently operate in a challenging environment. On the financial side, premiums are stagnant, interest rates low, and many cost-cutting measures have already been enacted. On the other hand, customer empowerment is growing. Customers are finding the information and offers they need to switch providers more freely than in the past – customers that insurers can ill afford to lose.

For many carriers, the key to preserving customer relationships still lies in personal interaction, executed through traditional distribution and service models with tied agents and brokers. For some customer sets – those who strongly favor personal interaction – this business model works well. Yet a growing segment of customers, especially those 30 years and younger, differ in some key aspects. While they still look for help and advice, they seek personal contact in the context of a holistic, omni-channel experience; they communicate and find information whenever, wherever and however they want. And even traditional customers appreciate if their agents have broader and faster access to the information and specialists they need on a case-by-case basis.

How can insurers keep – and hopefully even expand – these diverse customer sets, old and young alike? What factors drive retention and loyalty? To explore these questions, we surveyed more than 12,000 insurance customers in 24 nations about relationships with their insurers, what they perceive as valuable and in what ways they would like to interact and obtain new services going forward.

We found that while insurers understand well how to cover risks, they often fail to engage their customers on an individual basis. Even though insurance is complex, customers want to be involved, emotionally and rationally. When insurers act on this knowledge, customer share can rise.

Get the German translation of the report: https://www.ibm.com/downloads/cas/AX3RMAPQ

Get the Spanish translation of the report: https://www.ibm.com/downloads/cas/D4BGYEQ5

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Meet the authors

Lee-Han Tjioe, Vice President and Consulting Partner, IBM Global Business Services

Christian Bieck, Global Insurance Leader, IBM Institute for Business Value

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