November 10, 2011 – The need for insurers to offer a compelling user experience is borne out in a global survey of 119 insurers conducted by Accenture.

While 91 percent indicated that future growth depends on providing a special customer experience, the survey showed that a majority do not currently see themselves as doing so. Indeed, when asked about their ability to provide their customers with multi-channel access to their services, including through mobile devices, 79 percent rated themselves as “average” or “among the weakest” in the industry. Moreover, 70 percent rated themselves as “average” or “weak” in their ability to tailor products and services to customers’ needs and 64 percent gave themselves similar ratings in their ability to provide innovative products and services.

“To pursue profitable growth, insurers need to achieve the kind of differentiation that allows organizations like Apple to charge a premium while building customer loyalty,” said Thomas Meyer, managing director of Accenture's Insurance practice for Europe, Africa and Latin America. “And as Apple has shown, the answer is consumer-driven innovation that creates an exceptional user experience.”

To create this customer-driven environment, the survey found that insurers are investing heavily in mobility, with respondents indicating an $8.9-million average investment on mobile capabilities in the past three years. What’s more, some 81 percent said they expected to increase their rate of investment over the next three years. Nonetheless, Meyer cautions that money alone is not enough.

“To approach the mobile opportunity, insurers should look beyond what their competitors are doing, and evaluate the innovations of other leading ecosystem players — such as banks, mobile operating system vendors and emerging start-ups that reshape entire industries through mobile computing,” he said. “They should also explore the possibilities that a mobile ecosystem offers. By partnering with other key players, such as a bank or online payment service, a retailer, or a telecommunication operator, the insurer becomes part of a mobile initiative that gains wide adoption more quickly, offers greater functionality, and opens doors to large numbers of new customers.

A similar build out is under way for analytics, with an average of $21 million per insurer spent over the past three years and 68 percent of respondents indicating that they will increase spending on analytics capabilities over the next three years. John Del Santo, global managing director of Accenture's Insurance practice, said that as insurers already have a handle on basic policy, loyalty and demographic information, they need to tap new data sources that can reveal more about consumer attitudes and usage information in order to differentiate and grow.

“Our survey reveals that insurers realize that improvement is required and additional investment is needed to enhance their analytics capabilities and better anticipate customers’ needs,” he said. “Access to new sources of data, for instance from social media, and improvements in data consistency, allow for much richer insights and help insurers answer questions such as ‘how will my customer behave, what are his or her interests, and what will happen?’”

This story originally appeared on Insurance Networking News.

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