Customers want insurers to be purpose driven, embedding ESG and risk prevention

Consumers want insurance companies to do more than just deliver coverage, but to also help them reduce and prevent risk too, a recent report by Bain & Company has revealed.

The Customer Behavior and Loyalty in Insurance: Global Edition 2023 report surveyed 28,765 consumers in 14 countries and looked at their behaviour, loyalty and impact of purpose on insurance companies.

It concluded that they overwhelmingly want risk prevention and mitigation services from their insurers, not only help when there is disruption.

In Brazil 97% of survey respondents indicated interest in risk prevention as well as 81% of respondents from Japan. Additionally, more than 40% of millennials said they are willing and interested in paying for life insurance that includes risk prevention.

Bain analysts noted that changing customer behaviour also means a shift for insurance agents, who historically pushed out offerings with a pitch, and now need to pull in customers by addressing their priorities at the right moments.

Technology, including digital tools and advanced analytics, will allow insurance companies and their agents shift away from a transactional role to a broader relationship-based consumer interaction, analysts added.

Henrik Naujoks, a partner at Bain & Company, said: “The consumer demand for more risk-prevention beyond traditional insurance services has led to new services. For example, a European health insurer has launched new services and enlisted partners, such as health coaching and doctors.

“In some cases, the new services can lead to developing stronger relationships with consumers as in Southeast Asia, where a life insurer launched health and parent online forums that led to 300,000 customers signing up in the first year, with one-fifth of active users having then met with their insurance broker.”

Bain highlighted that insurers will need to deliver on the promise to address elements that consumers value most, including being a purpose driven company, as well as incorporating risk prevention and mitigation.

The consultancy company also shared a number of recommendations that insurance companies can follow to stay on this transformation from functional product excellence to serving the social/ emotional needs of customers.

These include risk-prevention, described as the next frontier. As most customers across regions are open to risk-prevention services from insurance companies, they also want to be rewarded for their risk-prevention habits.

However, Bain noted, to date, many consumers are not currently using risk-prevention services. There is opportunity to improve as consumers are open to sharing data with insurers and there is growing infrastructure to leverage consumer data to motivate and reward risk-prevention habits.
The second recommendation is to be purpose-drive, as consumers expect insurance companies to have a higher purpose. The survey revealed that 80% of global consumer survey respondents want insurers to embed environmental, social, and corporate governance (ESG) initiatives into their proposition.

As insurers enact a strategy focused on purpose, this will also strengthen loyalty and relationship with their customers, Bain noted.

The final recommendation is to improve and seamlessly embed digital usage into the omnichannel approach. According to analysts, while the pandemic increased the access to digital tools in the insurance industry, use still lags behind. Consumers often use digital tools to research and for simple episodes. However, consumers rely on a hybrid approach for more complex episodes.

Source: Reinsurance News,

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