Even as customers diversify their channel preferences and gather information and quotes from a variety of sources -- including digital, mobile and social media -- the personal lines insurance agent remains an essential part of the distribution network. An Accenture survey of more than 4,000 U.S. automobile and home insurance customer found that 76% of respondents expressed a strong or moderate preference for setting up and paying for their auto and home insurance policies with an agent.
Yet, while agents will remain an important part of the distribution mix, direct insurers continue to gain share as customers grow increasingly comfortable buying policies online. To stay viable, agents must be integrated with Internet, social media and mobile capabilities, so that customers can obtain information and quotes through their chosen channel, even if the ultimate purchase is made through an agent.
Customers like to select how and where to obtain information. When asked their primary preference for obtaining quotes, 43% of respondents chose websites, while 26% chose the telephone and 26% said they prefer to do so in person. A much smaller percentage (4%) chose mobile applications. And, when it comes to getting information about products and prices, almost three-quarters (72%) of respondents expressed a strong or moderate preference for going to an insurer's website.
As our survey indicated, insurers have a tremendous opportunity to build customer loyalty and establish differentiation. More than one-quarter (26%) of respondents either do not plan to renew their auto or home insurance policy with their current insurers, or plan to look at other insurers' offerings. And nearly half (46%) think that the products and services offered by different insurers are essentially "all the same". We also found that more than one-third (38%) of consumers are willing to pay for personalized advice about the insurance that is best for them. Of that group, more than half (56%) are willing to pay at least 10% more.
This presents an opening for insurers to grow market share, as so many customers plan to shop around when renewing their policies. While price remains the primary consideration in buying, the distribution model can provide differentiating factors such as the right interaction channel, advice and speed.
To maximize the potential of their agency networks, insurers and agents need to work together to provide customized experiences based on an understanding of customer preferences. There are four key elements in this process:
- A customer-centric operating model. Insurers need to develop a strategy and roadmap to dismantle the internal barriers that constrain agents, contact centers, the Internet, mobile, social media and other channels from working together to better meet customer needs. For most, this will entail a change of operating models, from one supporting multiple independent channels to one which enables a seamless customer dialogue across channels. Achieving this alignment typically entails not only the development of new capabilities and partner relationships but also tackling difficult changes to organization design, governance, performance management, incentives, behaviors, and culture.
- Advanced analytics and segmentation. Personal lines insurers need sophisticated customer segmentation and analytics to improve conversion rates, cross-sell, and retention. What's more, the resulting insights need to be integrated into agent and insurer's business processes. Insurers also can benefit from segmenting their agent base so that relationship or advice oriented buyers can be connected with agents who are most likely to make the sale, establish an enduring relationship and grow their share of the customer's wallet.
- Enhanced agents' digital presence. Insurers can leverage their scale and technology investments to cost-effectively extend high-quality robust digital, social, and mobile capabilities to agents. Fueled by advances in real-time experience optimization and configurability, digital technologies have become more flexible and can enable carriers to personalize a customer's digital experience and integrate unique agent value propositions for specific customer segments that are likely to value an agent relationship.
- A new support model for agents. The Internet and mobile apps can promote self-service for routine transactions, call centers can serve as a round-the-clock extension of an agent's office, and advanced telephony services can improve staff productivity and effectiveness. Mobile and collaboration technologies can help agents be more responsive and draw on the necessary experts wherever and whenever they can help to close a sale or provide timely customer service.
Many agents are well-positioned for building relationships, offering advice, selling more complex policies, and for cross-selling and retaining customers. A concerted multi-channel distribution strategy – one that reflects the changing customer preferences seen in our consumer research – will improve their performance in all of these areas, while enabling insurers to build customer loyalty and establish lasting competitive differentiation.
About the author:Erik Sandquist is a managing director in Accenture Property and Casualty Insurance Services.