Mobile Can Increase Retention, Loyalty and Revenue Opportunities
Capgemini report finds internet/mobile channels have great potential to make customers happier, which may come at the expense of agents.
Insurance Networking News, February 28, 2013
Insurers are shifting their focus from cost-cutting initiatives to revenue growth as financial markets stabilize and premiums rise to healthier levels, according to Capgemini’s “2013 World Insurance Report.” However, customers remain price sensitive, and insurers should consider multi-distribution initiatives, specifically mobile, to decrease operational costs and increase retention and loyalty, the report said.
“While face-to-face remains the primary form of interaction for most insurance customers, mobile has become vital in the drive to meet customer needs in terms of access, with a growing number of customers using their mobile phones to engage with insurers. In fact, mobile is becoming the channel of choice for a number of customer interactions, especially on the research and servicing side, so insurance executives are exploring different ways in which mobile can play a role throughout the insurance value chain,” the report reads.
More life insurance customers access the Internet through personal computers and mobile devices, and the internet/mobile channel is expected to grow 16 percentage points over the next five years, entirely at the expense of face-to-face distribution, Capgemini says.
For non-life products and especially for personal lines, consumers are becoming more comfortable with purchasing through websites and call centers. Direct networks already account for 22 percent of distribution, nearly the same proportion as agents, and direct and other networks will take more market share from agents over time. Tied agents, independent agents and brokers are expected to continue to dominate commercial lines.
Reasons to Invest in Mobile Distribution Channels
• Anytime/anywhere/any device service for their research, purchase, and service interactions.
• Mobile functionality is beginning to influence insurance shopping decisions and more new shoppers expect it.
• Internet/Mobile is cheaper way to reach and service customers than face-to-face, and self-service options deflect interactions from branches or call centers.
• Mobile phones could outnumber PCs by 4 to 1 worldwide by 2013, according to a forecast by Wireless Expertise.
• Consumers are more likely to check cross-sell recommendations, pre-approved online discounts, and integrated product offerings on mobile phones due to the speed, convenience and ease of access.
Insurers need sophisticated multi-distribution strategies that integrate channels and information to drive down customer retention and acquisition costs, Capgemini said, and there are additional internal and external benefits when done correctly, including productivity improvements come from the use of technology to, for example, conduct virtual meetings around the world and improve collaboration. New customer experiences, leveraging mobile, social and online platforms can be created, offering customer insights through tracking or analytical tools to analyze customer behavior patterns. New products and services, such as mobile claims, remote mobile/video service, online policy management, social benchmarking can be created, and can offer opportunities to extend service offerings to new technology environments, Capgemini said.
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