how insurers can heed the voice of customers, rethink ...file/ey-customer_centricity_ebook.pdf ·...
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Welcome to the Consumer RevolutionHow Insurers Can Heed the Voice of Customers, Rethink Relationships& Embrace Innovation to Drive Profitability & Market Leadership
Life-Annuity InsuranceKey Issues & Outlook 2013Welcome to the consumer revolution
More demanding –expecting morecustomization,personalization,flexibility and“me-tricity”
Mobile andtechnology-enabled
More sophisticatedin their financialservices needs
More diverse –global markets,empowered womenin the workforce
80%50 billionconnected devices globally
Have access tomobile telephony
60+%have smart phones orlow-cost tablet computers
Globalconsumers
in 2020
Source: Ernst & Young GlobalConsumer Insurance Survey, 2012
Listening to the voice of the customer
Welcome to the consumer revolution
The 2012 Ernst & Young Global Consumer Insurance Survey asked 24,000 consumers in 23 countries around the world howthey feel about their insurance needs and relationships with current carriers. The findings highlight the challenges andopportunities faced by insurers around the world – this is very much a “good news, bad news” story.
Consumers are generally confident in and satisfied with their carriers, but … . . . want them to work a little harder to keep the business.
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/fairlyconfident product is right for needs)
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 feltinsurer made a great orfair amount of effort
Source: Ernst & Young GlobalConsumer InsuranceSurvey, 2012
6.8Asia-Pacific
7.0Europe
7.5Americas
Regional average
Customer satisfaction ratings
Mean score out of 10
Insurance industry impacts: good news and bad news
Welcome to the consumer revolution
First, the bad news: many insurers are not keeping up with today’s more informed, highly empowered,dynamic consumers – who may know as much about your company and your competitors as youknow about them.
Product transparency
Specifically, insurers need to improve along four dimensions:
Service quality Rewarding loyalty Communication
$ ! ?
Insurance industry impacts: good news and bad news
Welcome to the consumer revolution
Now for the good newsThere is much to learn and many best practices to emulate from other industries.
Constant marketresearch and innovationfocus from consumerpackaged goods
Customer loyalty andrewards programs fromairlines, retail, bankingand other sectors
Robust analytics frombanking and
e-commerce
Personal touchfrom hospitality
Welcome to the consumer revolution
More good news: growth opportunities with current base
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 forloyalty – these are the steps insurers must take toseize the growth opportunity.
Life and pensions. Customers who have bought another product fromthe same provider in the last five years
19%Europe
Regional average
Consumers who prefer to buy multipleproducts from the same provider
52%
Source: Ernst & Young GlobalConsumer InsuranceSurvey, 2012
The journey to customer centricityThe journey to customer centricity is not easy. But insurers that can move forward along the right strategiccourse will find many opportunities to drive growth, transform operations and seize competitive advantage.
Welcome to the consumer revolution
TakeTake a realistic look at yourpropositions (solutions, not products)– what will it take to deliver whatcustomers want at a price they wantto pay, and still make money?
LearnLearn to be adaptive –use detailed customerinsight to test, learnand act quickly,accelerating theprocess withprototypes
StartStart to build aculture that puts thecustomer at thecenter and alignsobjectives, targets,rewards andrecognition withcustomer needs
FocusFocus on some key levers and buildmomentum throughout the organization
InvolveInvolve distributorsand, together, buildstronger partnerships
DefineDefine yourtarget customersand their needs
GenerateGenerate customerengagement acrossthe relationship lifecycle to build loyalty
Next step > operationalizing customer centricity
Get digitalMake friends with and followersout of your customers
Operationalizing customer centricityCustomer centricity is both a strategic mindset and a set of specific operational capabilities.
Welcome to the consumer revolution
Segment smarterFocus on multiple attributes, likepotential lifetime value and“switching” risk, not just channeland product, to identify andkeep the customers you want
Embrace analyticsRethink and reimagine thecustomer base and currentoperations by asking more andbetter questions of operationaland external data
Integrate channelsShare information and createconsistent experiences acrosschannels so customers canknock on any door they want
Reorient the cultureEstablish rewards for keepingexisting customers happy, notjust winning new business
AB C
Welcome to the consumer revolution
Source: Ernst & Young
Education andawareness
Researchand decide
Purchase Use and service Loyalty
Targeted advertising —direct mail, telesales
Wordof mouth
Radio, TV, and print
Internet ads
Viral marketing
Blogs
Social media
Landing page
Comparison/thirdparty sites
Tools andcalculators
Intermediaryagent
Interactivechat
Interactive video
Call center
Website
Mobile/smartphone
Push alerts
Instantmessenger/chat
Email, paper
Call center
Rewards/incentivescommunication
Operationalizing customer centricityThe overall customer experience is influenced by customers’ direct and indirect interactions with an organization —both physical and digital touch points. Both must be managed effectively in order to maximize the experience.
Overcome the risk-averse culture common to many insurers� Drive culture change from top-down� Engage all associates to identify improvement opportunities� Reward collaboration across functions� Experiment, test and learn – open discovery centers and research labs
Shift to longer-term thinking and decision-making cycles�Don’t overlook the lifetime value of the in-force base in the chase for the
short-term rewards of new business� Unleash internal customer advocates to explore long-term relationship building
Explore disruptive growth strategies� Design “insurance as a service” models� Rethink core customer value propositions� Seek new partnerships across other industries
Driving customer centric innovationTrue customer centricity goes beyond operational matters. It’s about reorienting the culture, rethinking the meaning of risk andaltering behavioral patterns. In other words, strong executive leadership and effective organizational change management arecritical enablers. What must insurers do?
Welcome to the consumer revolution
Driving growth through customer centric innovationTomorrow’s insurance leaders will leverage customer-centric innovation to differentiate themselvesand gain sustainable market leadership positions.
Welcome to the Consumer Revolution
Insuranceas a serviceand hybridmodels
Higher satisfaction,loyalty, retention
Market leadershipCompetitive advantage
Brand differentiation
The journey to maturity: achieving and sustaining customer centricity
Welcome to the consumer revolution
Segmentation:Defined targets based on clearinsights into current andpotential value
Customer lifetimevalue management:Active involvement at key pointsincluding lapse, retirement andother milestones
Culture:Management by key metric (likecustomer lifetimevaluemanagement) with clear focus on meeting needs ofprofitablecustomers
Service delivery:Value-adding touch points –phone, onlineself-service toolsand information, distributors
Distributor management:Highly selective approach based on customerprofitability, with partnerships based oncustomer engagement
AB C
Brand and market position:High brand recognition and strong positiveassociations amongst target customers,based on real evidence and reputation forcustomer focus
Propositions:Focused offerings aligned to needs ofprofitable customers, with flexible design,transparent pricing and customer self-service.
Customer-centric organizations measure the maturity of their strategies and capabilities across a range ofdimensions. Choosing the right metrics provides a framework for measuring current performance and evaluatingoperations and for prioritizing investments and initiatives; they also help guide the ongoing journey to continuousimprovement, truly advanced capabilities and sustainable competitive advantage.
Welcome to the consumer revolution
Start thecustomer centricconversation
Shona BurnsInsurance [email protected]+617 3011 3333
Christine DelanyGlobal Insurance [email protected]+44 020 7951 1733
Paul ClarkGlobal Insurance [email protected]+61 2 8295 6967
May KnightInsurance Advisory [email protected]+852 28499518
Ernst & Young
Assurance | Tax | Transactions | Advisory
About Ernst & YoungErnst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 167,000 people are united by our shared values and anunwavering 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 GlobalLimited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit www.ey.com.
© 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 intended to be a substitute for detailed research or the exercise of professionaljudgment. 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 aresult of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.
ED none
Kaenan HertzInsurance Advisory – Americas+1 212 [email protected]