Insurance Market Pulse Survey 2019 in Belgium
A comfortable grey zone?
Very few insurance companies are top of mind with Belgian customers. One in three respondents this year cannot name a second insurer when asked. Furthermore, customers don’t see any difference between their current insurance provider and the one next door: 31% of the respondents would not know which insurer to choose if starting out again. Our annual survey shows a steady increase in these numbers over recent years.
At the same time, our 2019 survey reveals a Belgian insurance market in which 78% of the customers are satisfied with their provider. Elements such as speed & efficiency and value for money are important drivers. Taking a closer look at the different customer segments, we see that half of the population identifies as rather traditional and content with their way of doing things.
This comfortable grey zone has led insurers to believe they should not fear disruption.
In this article, we discuss the choices insurers need to make today that will impact their relevance and ability to delight their customers across all interactions in the future. It’s time to bring some color to a grey industry.
From vulnerability to volatility: disruption lies ahead
According to Accenture’s Disruptability Index, the insurance industry has moved from vulnerability to volatility. Insurers face low productivity growth, low brand intensity, and low levels of innovation compared to other industries. Traditional strengths are becoming new weaknesses, exploited by disruptors. Growing segments of customers are seeking fast, convenient and above all first-class digital experiences. This will have a significant impact on customer expectations and leave the door open to new digital entrants on the market.
Today’s insurance customers are not asking for complex products. But the pressure of competition and commoditization has led to an array of confusing and hard-to-understand features for them to choose from. Simpler and more modular product offerings are key to re-establish trust. Our survey shows that insurance products explained by intermediaries are 25% better understood than via digital channels.
Insurers need to prepare themselves or risk losing market share. This will require restructuring their organizations combined with the use of technology and data to build enhanced services and offerings, and even new businesses, that address their existing and future customers’ pain points.
Opportunity to shine in two ways
Capturing future customer segments is not as simple as converting traditional business to online business through digital channels. The pitfall of focusing purely on price and convenience at the cost of customer experience should be consciously avoided. In an increasingly digital world, human interactions still matter. They generate value, differentiate and ensure long-lasting relationships.
So how can insurers establish the perfect ‘phygital’ experience?
Firstly, by seamlessly integrating physical and digital services in their overall distribution channel strategy. Insurance customers are looking for interactions with a human touch plus the possibility to effortlessly switch between channels while enjoying a consistent and personalized experience throughout.
Secondly, insurers need to leverage data to offer intelligently personalized interactions via the right communication channel, at the right time, and tailored to their customers’ preferences. Our research shows that insurers have a real opportunity to close the gap between today’s communication’s channel usage and channel preference.
Beyond traditional insurance services
Another important way for insurers to differentiate themselves is to look beyond traditional insurance products and offer value-added services that address broader customer needs. By developing an ecosystem of insurance-related services, insurers can strengthen customer relationships, establish new sources of revenue and win over customers from competitors.
Our survey shows a clear appetite for such services across all three product groups (Motor, Home, Life & Health):
- More than 7 out of 10 insurance customers surveyed showed an interest in insurance-related services.
- Beyond pure interest, almost 4 out of 10 respondents said they are willing to pay additional premiums for these new services which go beyond typical insurance products.
- Finally, 1 out of 8 of respondents said they would switch insurance provider for the ecosystem services they offered.
Although still in its infancy, we observe a growing number of ecosystem services appearing on the Belgian market. They include smart home solutions for the elderly (e.g. Phil at Home and Charlin) as well platforms that connect customers with local tradesmen (e.g. Jaimy and So Simply).
This is still an untapped market. Insurers that want to expand towards ecosystems should act now, starting with reflecting on the right ecosystem service model for them and the role they want to play. Then they will be able to exploit first-mover advantage and capture a growing segment of innovation-hungry customers.
It’s time to leverage the colors of (r)evolution and differentiate
The results of our survey strongly suggest that to escape the ‘insurance shades of grey’ and to stay relevant, insurers should leverage the colors of (r)evolution to re-engage with their customers. By combining a seamless phygital experience with a carefully crafted ecosystem strategy, insurers can stay ahead of disruption and differentiate themselves.
Want to compare your insurance company’s performance with anonymized competitors and benchmarks? We’d be delighted to meet you for a conversation.
The infographic summary of the results is also available here.