Consumers place great importance on advice. However, there is a disconnect between how the industry perceives the need for (and value of) advice and how those issues are seen by the consumer, said Mr Stephen Collins, CEO, ReMark International in its second annual Global Consumer Study (GCS).
As such, insurers need to accept primary responsibility for engaging directly with customers when designing propositions for the advice channel, he said.
Industry vs customer perspective
In its research, ReMark noted that the role of the advisory channel could benefit from a rethink. The table (Figure 1) summarises the picture from an Industry versus Customer Perspective. Saying that the mismatch is apparent, the report added that at this point, the industry is expecting the adviser to drive provider selection but the problem with this strategy is that advisers struggle to identify new propositions for customers.
For companies that want to grow or disrupt the market, the focus should be on what customers need and want. Ultimately, if insurers get this right, advisers will sell their products, said the report.
Bundling or bungling?
Mr Collins also noted that customers continue to buy bundled products. “While there is an industry perception that cost factors underpin the sometimes startling lapsation numbers, we believe the problem lies in consumers’ perception of value as a result of poor engagement around these products. By educating customers, improving their experience and adapting to changing needs, bundled products are likely to retain their place in insurers’ product portfolio,” he said.
Brand: Promise versus promiscuity
Another issue that confronts all industries including insurance is disruptive change driven by digital technology, especially the rise of social media and mobile. These trends are reshaping how insurance is sold and how brands work. ReMark counsels the industry not to see this trend as playing out universally across all markets.
“Our research also suggests the ‘solution’ to this issue is one that has been discussed by marketers for decades – insurers need to ‘share’ their brand with their customers,” Mr Collins said.
Analytics: Symphony versus noise
Finally, Mr Collins said the industry needs to move from Big Data to smart, relevant data – data that examines and improves the customer experience rather than focusing purely on underwriting efficiency and cost-out activity.
ReMark’s report entitled “Through the looking glass: Understanding customers – easier to say than do”, is based on online interviews with 8,000 insurance consumers across 14 key life markets, namely, Australia, China, Malaysia, Indonesia, Japan, Brazil, Canada, Mexico, the US, France, Germany, UK, Russia and South Africa. These markets account for around 85% of global life insurance risk premiums and approximately 80% of global GDP.