After several years of turbulent times, when seasonal norms were disrupted and pandemics and disease swept the globe, these radical disruptions have added new and different risks to customers’ risk maps. Faced with this reality, customers are demanding that insurers not only help them when disruptions occur, but also engage in risk mitigation and prevention.
The global edition of Bain’s Customer Behavior and Loyalty in Insurance: 2023 report provides insights into changing approaches to insurance and the needs of customers. Customers expect to be rewarded for their choices, with 59 percent of respondents wanting to be rewarded by their life insurance company for living well.
40 percent of millennials favor risk prevention
Bain’s new survey of 28,765 customers in 14 countries reveals that consumers want more from their insurers than just coverage.
A majority of consumers want insurers to provide risk prevention and mitigation services. While 97 percent of respondents in Brazil and 81 percent in Japan expressed interest in risk prevention services, 40 percent of millennial respondents said they would be interested in purchasing life insurance with risk prevention services.
New customer demands create new services
According to the report, changes in customer behavior require a change for insurance representatives who have been marketing their services through presentations until today. They now need to win customers by responding to their priorities at the right time. New technologies, including digital tools and advanced analytics, will help insurers and their agents move from a transactional role to a more comprehensive, relationship-based model of customer engagement.
Onur Kayahan, Associate Partner at Bain & Company, commented on the research results: “For insurance companies, focusing on preventive services is of high importance in managing the increase in input costs and pressure on pricing, especially in motor and health branches. While we observe that various steps have been taken by companies in this field in Turkey, especially in the health branch, their expansion and diversification to different branches constitutes an opportunity for many companies.”
BAIN’s roadmap recommendations for companies
The next front is risk prevention:
Many customers in many parts of the world are keen for insurers to offer risk prevention services. Customers also want to be rewarded by insurers for their risk prevention habits. For example, customers want to be rewarded by insurers when they drive their cars safely. With consumers open to sharing their data with insurers, there is room for improvement in this area.
Insurers must take the initiative: Consumers expect insurers to have a higher purpose. In the global survey, 80 percent of respondents want insurers to include environmental, social and corporate governance in their propositions.
Digitalization should be improved: While access to digital tools has increased in the insurance sector during the pandemic, usage still lags behind other sectors. Consumers frequently use digital tools to research and get service for simple cases, but use a hybrid approach for more complex cases.