NU Online News Service, May 27, 1:30 p.m. EDT
Insurers plan to invest $84 million, on average, over the next three years to improve their multi-channel distribution strategies, according to findings of a global survey of 125 insurers by Accenture.
The survey also indicates that insurers will shift investment priorities to mobile technologies and digital marketing, including social media such as Facebook, and channel integration over the next three years.
While a limited number of insurers said their current investments are focused on creating mobile capabilities, improving digital marketing and integrating channels (19 percent, 34 percent and 36 percent, respectively), a much higher percentage of insurers are planning or considering investments in these areas for the near future (62 percent, 49 percent and 44 percent, respectively).
"Increasing investment in mobile capabilities--to take advantage of the growing use of smart phones--and in digital marketing, to create new opportunities to influence customer choice, is necessary, but not sufficient in today's environment," said Serge Callet, global managing director of Accenture's Insurance practice in a statement. "Consumers are not simply replacing one channel with another, but are diversifying and using more channels than ever for all of their needs. The challenge facing insurers is to develop a distribution strategy that capitalizes on the strengths of each respective channel and that will allow them to match the right customers with the right products and services, at the right price, through the right channels."
According to the survey, insurers will increasingly tailor their marketing strategy to specific customer segments. More than 26 percent of insurers said they will customize their products, promotions, channels, services, and pricing strategies to specific customer segments in the next three years. The survey showed that only 14 percent of insurers currently tailor all of these activities by customer segment.
The telephone survey was conducted by Kadence Ltd. for Accenture from December 2009 through April 2010. A total of 125 major insurers equally split between life and property and casualty carriers, were contacted for the survey.
Among the survey's other findings:
o Sixty-three percent of insurers do not consider their current distribution model as a source of competitive advantage.
o On making decisions to invest in distribution over the next three years, 85 percent of insures said they planned to make the investment because of the emergence of new technology. Changes in customer needs and attitudes were cited by 84 percent of insurers. New regulation and the importance of advice in the distribution of insurance products were cited by 81 percent of insurers respectively.
o Sixty-three percent of insurers said that all services--including quoting, underwriting, billing, claims declaration and account management--will be available online within the next three years. Only 21 percent said they will have these services available on mobile devices within that time.
o Seventy-five percent of insurers said that developing relationships with "non-tied" channels (independent agents and brokers, and others) was a main priority, with nearly as many, 73 percent, naming the development of specialized tools and sales support as a major focus.
o Two-thirds, or 66 percent of insurers, identified investment in training as a key priority for optimizing the performance of their captive sales force, with nearly as many, 64 percent, identifying specialized tools and sales support, including information technology, as their main priority.
o Aligning IT infrastructure with a defined distribution strategy was cited by 63 percent of insurers as a key challenge.
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