F E AT U R E S
Leading in a New Era of Connectivity with Bain & Company Bain & Company - a global consultancy helping the world’s most ambitious change makers define the future - created a customer behaviour and loyalty in insurance survey in 2014, and have repeated the survey every year since. Modern Insurance spoke with Mário Conde, a Partner based in their Amsterdam office, about the results of the 2020 survey.
In the UK, 40% of customers have a connected device but very few are connected to the insurance service
E
ach year, Bain & Company conduct a customer loyalty survey across the industry. Last year, they covered 16 countries and 170,000 customers – 17,000 of which were UK customers.
The first headline of the survey is ‘Loyalty’, which drives customer lifetime value. This concept is extremely important for insurers: both life and P&C. When considering the customer lifetime value of promoters, it is six times higher than that of detractors, and is driven by customers who stay longer with you. People who buy more products and tell their friends. Loyalty, which we measure through NPS (Net Promoter Score) is a number that really delivers that customer lifetime value. In terms of where we see the market, while there is a large gap between loyalty leaders and laggards, most insurers operate in largely undifferentiated markets – the UK is no exception. In the UK, NPS scores fall at 5-7% in P&C and just 2% in life. Compared to figures of the US - 30% plus – this is quite low. Millennials are a challenge; they are 5 percentage points lower that other customers. They are more digital, are more likely to switch, and are more willing to buy insurance from tech companies. When we think of differentiation, we see insurers doing two things to drive loyalty and relevance. Insurance is a low-touch industry, so creating reasons to interact with you customers begins that drive. Then we see it through ecosystem services, which is a current trend in the industry, where insurers are adding more benefits beyond the core insurance products. This serves other needs of the customer and creates reasons for engagement and interaction.
Q
The 2019 report states that connectivity and digitalisation is the way forward, that there is a strong link between connectivity and loyalty. Are insurers utilising this information effectively? Could they do more?
A 48
|
MODERN
INSURANCE
There is definitely a connection between the ability to deploy connected devices and the ability to gather data
