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How Insurers Can Heed the Voice of Customers & Embrace Innovation to Drive Profitability Rethink Relationships ofitability & Market Leadership
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Welcome to the Consumer How Insurers Can Heed the Voice of & Embrace Innovation to Drive Profitability
Consumer Revolutionof Customers, Rethink Relationships
ofitability & Market Leadership
Life-Annuity InsuranceKey Issues & Outlook 2013Welcome to the consumer revolution
Mobile andtechnology-enabled
More sophisticatedin their financialservices needs
80%Have access to mobile telephonyGlobal
consumersin 2020
Source: Ernst & Young GlobalConsumer Insurance Survey, 2012
More demanding –expecting morecustomization,personalization,flexibility and“me-tricity”
More diverse –global markets,empowered womenin the workforce
50 billionconnected devices globally
60+%have smart phones orlow-cost tablet computers
Listening to the voice of the
Welcome to the consumer revolution
The 2012 Ernst & Young Global Consumer Insurance Survey asked 24,000 consumers they feel about their insurance needs and relationships with curropportunities faced by insurers around the world – this is very much
Consumers are generally confident in and satisfied with their carriers, but …
Life and pensions. Customer confidence and satisfaction scores
85%79% 6.8
76% Asia-Pacific7.6
Americas7.0
Europe
Regional average Satisfaction scores (out of 10)Confidence scores (percentage very/fairly confident product is right for needs)
Source: Ernst & Young Global Consumer InsuranceSurvey, 2012
6.8Asia-Pacific
7.0Europe
7.5Americas
Regional average
Customer satisfaction ratings
Mean score out of 10
the customerasked 24,000 consumers in 23 countries around the world how
rent carriers. The findings highlight the challenges andmuch a “good news, bad news” story.
. . . want them to work a little harder to keep the business.
Non-life insurance. Lack of effort made by insurer at renewal
82%Europe
68%Asia-Pacific
75%Americas
Regional average Respondents that cited“little” or “none”
Life and pensions. Effort made by existing provider to retain customer
Asia-Pacific
46%
Europe
30%
Americas
24%
Regional averageRespondents who felt insurer made a great orfair amount of effort
Insurance industry impacts:
Welcome to the consumer revolution
First, the bad news: many insurers are not keeping updynamic consumers – who may know as much aboutknow about them.
Specifically, insurers need to improve along four dimensions:
Service quality Rewarding loyalty
$
mpacts: good news and bad newsup with today’s more informed, highly empowered,
about your company and your competitors as you
Product transparency
ove along four dimensions:
Communication
! ?
Insurance industry impacts:
Welcome to the consumer revolution
Now for the good newsThere is much to learn and many best practices to emulate f
Customer loyalty andrewards programs from airlines, retail, banking and other sectors
Personal touch from hospitality
mpacts: good news and bad news
ewspractices to emulate from other industries.
Constant marketresearch and innovationfocus from consumerpackaged goods
Robust analytics from banking and
e-commerce
Welcome to the consumer revolution
More good news: growth opportunities
There is opportunity for insurers that canmaster all the consumer interaction points.
37%Asia-Pacific
16%Americas
Consumers want to build long-term relationshipswith and are willing to purchase multiple productsfrom their carriers. They aren’t doing so today,however. A simple, transparent buying experience;clear and effective communications; and rewards foloyalty – these are the steps insurers must take toseize the growth opportunity.
Life and pensions. Customers who have bought another product frothe same provider in the last five years
19%Europe
Regional average
Source: Ernst & Young Global Consumer InsuranceSurvey, 2012
pportunities with current base
points.
;for
om
Consumers who prefer to buy multipleproducts from the same provider
52%
The journey to customer centricityThe journey to customer centricity is not easy. But insurcourse will find many opportunities to drive growth, transform operations
Welcome to the consumer revolution
TakeTake a realistic propositions (solutions, – what will it takecustomers wantto pay, and still
StartStart to build aculture that puts thecustomer at thecenter and alignsobjectives, targets,rewards andrecognition withcustomer needs
FocusFocus on some keymomentum throughout
InvolveInvolve distributorsand, together, buildstronger partnerships
DefineDefine yourtarget customersand their needs
entricityrers that can move forward along the right strategic
transform operations and seize competitive advantage.
ealistic look at your(solutions, not products)take to deliver what
want at a price they wantstill make money?
LearnLearn to be adaptive –use detailed customerinsight to test, learn and act quickly,accelerating theprocess withprototypes
key levers and build oughout the organization
GenerateGenerate customer engagement acrossthe relationship life cycle to build loyalty
Next step > operationalizing customer centricity
Get digitalMake friends out of your
Operationalizing customer cCustomer centricity is both a strategic mindset and a set
Welcome to the consumer revolution
Segment smarterFocus on multiple attributes, likepotential lifetime value and“switching” risk, not just channeland product, to identify and keep the customers you want
Reorient the cultureEstablish rewards for keepingexisting customers happy, notjust winning new business
AB C
igitalMake friends with and followers
your customers
centricityset of specific operational capabilities.
Embrace analyticsRethink and reimagine thecustomer base and current operations by asking more andbetter questions of operationaland external data
Integrate channels Share information and createconsistent experiences acrosschannels so customers canknock on any door they want
Welcome to the consumer revolution
Source: Ernst & Young
Education and awareness
Research and decide
Targeted advertising —direct mail, telesales
Wordof mouth
Radio, TV, and print
Internet ads
Viral marketing
Blogs
Social media
Landing page
Comparisonparty sites
Tools andcalculator
Intage
Interactive chat
Operationalizing customer cThe overall customer experience is influenced by customers’ direct and both physical and digital touch points. Both must be managed effectively
Purchase Use and service Loyalty
n/third
drs
termediary agent
Interactive video
Call center
Website
Mobile/smart phone
Push alerts
Instant messenger/ chat
Email, paper
Call center
Rewards/ incentives communication
centricityand indirect interactions with an organization —
fectively in order to maximize the experience.
Overcome the risk-averse� Drive culture change from top-down� Engage all associates to identify imp� Reward collaboration across functions� Experiment, test and learn – open
Shift to longer-term thinking and�Don’t overlook the lifetime value of the in-for
short-term rewards of new business� Unleash internal customer advocates to explo
Explore disruptive growth� Design “insurance as a service” models� Rethink core customer value propositions� Seek new partnerships across other
Driving customer centric innovationTrue customer centricity goes beyond operational matters. It’s about altering behavioral patterns. In other words, strong executive leadership critical enablers. What must insurers do?
Welcome to the consumer revolution
averse culture common to many insurersdown
improvement opportunitiesoss functions
open discovery centers and research labs
and decision-making cyclesrce base in the chase for the
explore long-term relationship building
owth strategiesmodels
opositionsoss other industries
nnovationabout reorienting the culture, rethinking the meaning of risk and
leadership and effective organizational change management are
Driving growth through customeTomorrow’s insurance leaders will leverage customer-centric and gain sustainable market leadership positions.
Welcome to the Consumer Revolution
ustomer centric innovationcentric innovation to differentiate themselves
Insuranceas a serviceand hybridmodels
Higher satisfaction,loyalty, retention
Market leadershipCompetitive advantage
Brand differentiation
The journey to maturity: achieving and
Welcome to the consumer revolution
Culture:Management by key metrimanagement)with cleaprofitablecustomers
Service delivery:Value-adding touch points –phone, onlineself-service toolsand information,distributors
Distributor management:Highlyselectiveapproach based on customerprofitability, with partnerships based oncustomer engagement
Brand and market position:Highlyselectiveapproach based on customerprofitability, with partnerships based oncustomer engagement
Customer-centric organizations measure the maturity of their strategies dimensions. Choosing the right metrics provides a framework for operations and for prioritizing investments and initiatives; they improvement, truly advanced capabilities and sustainable competitive
and sustaining customer centricity
Segmentation:Defined targets based on clearinsights into current andpotential value
Customer lifetime value management:Active involvement at key pointsincluding lapse, retirement andother milestones
metric (likecustomer lifetimevalueclear focus on meeting needs of
AB C
Propositions:Focused offerings aligned to needs ofprofitablecustomers, with flexibledesign, transparent pricing and customer self-service.
their strategies and capabilities across a range offramework for measuring current performance and evaluating
they also help guide the ongoing journey to continuous competitive advantage.
Welcome to the consumer revolution
Start the customer centricconversation
[email protected]+44 020
Ernst & Young
Assurance | Tax | Transactions | Advisory
About Ernst & Young Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 167,000 people are unitunwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve t
Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization
© 2012 EYGM Limited.All Rights Reserved.
SCORE but the no. EG0122
1306-1089402 NYThis publication contains information in summary form and is therefore intended for general guidance only. It is not intendedjudgment. Neither EYGM Limited nor any other member of the global Ernst & Young organization can accept any responsibility foresult of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.
ED none
KaenanInsurance+1 212 [email protected]
Shona BurnsInsurance [email protected]
3011 3333
Christine DelanyGlobal Insurance [email protected]
020 7951 1733
Paul ClarkGlobal Insurance [email protected]+61 2 8295 6967
May KnightInsurance Advisory [email protected]+852 28499518
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 167,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.
Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit www.ey.com.
This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.
Kaenan HertzInsurance Advisory – Americas+1 212 [email protected]
