The rate at which respondents to an Accenture survey said that they were likely to switch insurance carriers this year translates to a total of about $400 billion in premium potentially changing hands, the consultancy said. And, insurers don't just have each other to worry about: Consumers are ready to look in other areas to purchase coverage as well.
Forty-three percent of the 6,000 respondents, who could select multiple responses, said they would consider buying insurance from banks. Twenty percent said they would consider home service providers (such as telecommunication or home security companies), 14% retailers and 12% auto dealers.
But 23% said they would consider buying insurance from familiar giant internet companies like Google and Amazon. That could be explained by a strong desire among consumers to align themselves with insurance companies that provide strong digital capabilities for customer service and interaction. More than two-thirds expressed interest in using mobile capabilities for claims reporting or displaying proof of insurance, while less than half have already done so.
"Competition in the insurance industry could quickly intensify as consumers become open to buying insurance not only from traditional competitors such as banks but also from Internet giants," said Michael Lyman, global managing director for management consulting within Accenture's Insurance industry practice, in a statement. "Personalization clearly emerges as a key driver in retaining existing customers and attracting new ones. Innovation in pricing strategy and the ability to make their customers feel that they are unique are thus critical to capturing share within the switching economy."
Accenture isn't the only industry observer noting the potential for established internet companies to make waves in the insurance industry. SMA partner Denise Garth recently published a research brief detailing moves Google has made to position itself not just as a aggregator (which it has a history of in the UK), but potentially an insurance data provider (in its recent acquisition of Nest Labs, an in-home technology provider, as well as its well-publicized work on driverless cars.)
"As Google continues to drive innovation and the integration of their technologies into our everyday lives, the level of customer intimacy and loyalty due to an integrated, seamless user experience will increase," Garth wrote. "And this is why the implications for insurance are so great: This is an outside-in, customer-driven approach to innovation that is causing insurers to rethink, reimagine, and reinvent a technology-enabled future. It will impact all lines of business in insurance from P&C to life and health to every aspect of the enterprise ... fundamentally changing the insurance value chain."
Customers already expect this Google standard from their insurance companies, Accenture found; and Lyman says that this report is a clear signal that insurers must focus on customer-focused innovation in order to be among the companies acquiring part of the $400 billion in churning premium.
"Only those insurers with the digital capabilities and flexible operating model to adapt effectively to the changing demands of customers will be able to attract the large number of customers who are set to leave their less farsighted providers," he said in a statement. "Visionary insurers must also be prepared to conceptualize their business more broadly, building online communities and offering non-insurance services -- such as USAA helping its customers buy cars -- and be willing to create ecosystems of partners who together can provide the total, personalized and convenient experience today's customers expect."