Insurance firms told to adopt multiple channel strategies

CEBU, Philippines - The IBM Institute of Business Value is encouraging insurance companies to embrace multiple channel strategies to reach out to changing insurance shopping and buying patterns of consumers.

A recent study released by the IBM Institute revealed that the shopping and buying patterns for insurance are shifting.

More than 60 percent of the 21,000 consumers surveyed in 20 countries indicated that they are planning to use more than one interaction point—such as phone, website or face-to-face meetings—to purchase insurance policies. Thus, insurance companies must embrace multiple strategies—incorporating both social media, and analytics techniques.

According to the report which is so far the largest global insurance study ever undertaken by the IBM Institute of Business Value - consumers selected online channels (49.5 percent) as their top preference for information gathering purposes to search for insurance. Following close behind was personal contact with an agent (47.9 percent), peer groups like friends and family (46.4 percent), and websites of aggregators or independent comparison providers (35.5 percent).

“Our findings show that the customer of the future is diverse and multi-modal. Consumers prefer interaction point choices. They can and will switch insurers if their preferred interaction points are not available,” Primo “Dondi” Aguas head sales of Insurance, general business under IBM ASEAN.

‘To simply put, insurance has shifted from a sellers’ to a buyers’ market,” he added.

The report recommends insurance companies to increase the number of available interaction points--as consumers want to use multiple touch points, insurers should make it easy for customers to search and purchase insurance products beyond personal interactions – employing print, social media and smart-phone channels.

These interactions should be branded consistently, present identical information, and allow users to switch interaction points without losing information provided at other points of contact.

Insurers should study the data of insurance search and purchase decisions and employ them effectively.

“They should also engage consumers actively to reveal data about their preferences so that can develop customized strategies based on personal experience. The use of customer analytics can reveal valuable behavioral data that will allow insurers to compare interaction point offerings to the preferred mix of targeted customers,” the report further indicated.

According to the study, customers are demanding good advice, a wide range of customized products and offerings and fast and efficient service. “To reverse the declining loyalty trend, insurers must focus on perfecting its interaction quality so that they can turn consumers into advocates of its business.”

While mobile shopping is emerging into a rising global trend, IBM’s survey surprisingly revealed that only 1 percent of consumers say they use their smart phones to search for insurance.

The study also found that consumers in Malaysia had the highest level of trust in the insurance industry and loyalty to their insurers, as compared to consumers in other countries surveyed. Generally the relationship between trust and loyalty is more pronounced in the emerging markets than in the industrialized economies.

For the study, the IBM Institute for Business Value partnered with the Institute of Insurance Economics of the University of St. Gallen, Switzerland, to gather the responses of 21,740 consumers from 20 countries globally in August 2010.

The IBM Institute for Business Value provides strategic insights and recommendations that address critical business challenges to help clients capitalize on new opportunities. The Institute is comprised of consultants around the world who conduct research and analysis in 17 industries and across five functional disciplines, including human capital management, financial management, corporate strategy, supply chain management and customer relationship management. (FREEMAN)