Unlike traditional insurance customers, millennials are looking for engagement and affiliation with their insurers. Henrik Naujoks, a partner with Bain's Financial Services practice, describes the three steps insurers can take to bring the value that younger customers expect.
Read the Bain Report: Customers Know What They Want. Are Insurers Listening?
Read the transcript below.
HENRIK NAUJOKS: Insurance customers don't have complicated needs. They want high-quality products for a reasonable price. They're looking for transactional excellence. However, it was very interesting when we did our survey of 174,000 insurance customers in 18 countries, we realized that especially the younger customers are looking for more. They are looking for engagement. They are looking for affiliation.
Now, insurers who deliver superior value, they earn the trust and the loyalty of their customers. But most of the insurers across the countries are not really differentiated, are not delivering on the value that customers are expecting, and they are vulnerable to the insurgents, to insurtechs, to companies from other industries.
Very striking—82% to 95% of millennials in countries like US, Canada, UK, China do want to buy insurance from insurgent providers, whether these are fintechs, whether these are retailers, whether these are automakers. This is a key risk.
We had a closer look at those insurers who are providing superior value, and they stand out on three dimensions. They excel in the core business, providing high-quality products for competitive prices, and providing you with a simple and digital customer experience. Second, they go beyond insurance. They build an ecosystem of interrelated services that are delivering additional value, that are providing interactions with a positive outcome. And thirdly, they make innovation a core priority. Insurers who are focusing on these three priorities will outperform the market and provide the values customers are seeking.
Insurers are falling short on delivering value to customers. Bain’s Customer Behavior and Loyalty in Insurance report shows how companies can fix the problem.