Florian Mueller: Loyalty in Insurance



More insurers are building a customer-centered approach by looking for ways to interact with consumers and deliver more value. Florian Mueller, a partner in the Financial Services practice, discusses how digital tools are helping insurers create new product and service offerings and improving customer loyalty.

Read the Bain Brief: Customer Behavior and Loyalty in Insurance—Global Edition 2016

Read the transcript below.

FLORIAN MUELLER: Insurers are moving towards a more customer-centered approach. For them, it's an alternative to a traditional focus on products, agents, and any of your financial concerns. Because they're realizing that there's really value in building a model that is based on customer advocacy. They realize that it's increasing their economics. And they see new technologies, which really enables them to better understand their customers and better serve them.

And competition is increasing. So we have fintechs on the one-hand side. They are reshaping the way their customers are experiencing insurance. And we have aggregators on the other side. They are directly interacting with the customers of the carriers.

So insurers really need to build on their customer assets. They need to ensure that they're not being sidelined into a low-value role of a commodity provider or utility. And Bain's latest global survey on consumers suggests that they need to fight to get in touch with their customers, because increasingly their frequency of interaction with the consumers really builds loyalty both in P&C and life.

It may vary across the country, so we have contributions which are more on the low level in countries like France and Spain. And then we have countries like China, Indonesia and Malaysia, where they're more at the high level. But in all of the countries that we surveyed, we see that it really contributes to loyalty.

And it's not only around mastering the basics of complex interactions which has the potential to really delight the customers—in areas like claims, or getting advice—but also increasing the number of simple digital interactions really helps.

And customers, they want more. So we see that 70% of the consumers...are looking for their carriers to provide them more than just classic insurance coverage. And the new digital tools really enable the insurers to do so. It really opens up a whole new universe of innovations and service offerings. Insurers are able to connect their IT systems to the smartphones of the users to the connected devices which they have in their cars, at home, within the factories.

And it allows them to build a new product offering and a new service offering. Whether it's in car insurance, where we have the black boxes, the dongles and the smartphones, which allow the insurers to provide additional services like street-sweeps alerts; or a detection in change-of-driving behavior which indicates a theft; or an automated submission of claims; it's a whole new range of opportunities that exist.

If we take a look at health insurance, for example, we see carriers increasingly engaging on topics like platforms and preferred networks. So they're implementing solutions around telemedicine, a digital-loyalty program, which increases prevention and allows them to reduce the average cost of claims. We have players like Ping An, one of the large Chinese carriers, who has implemented a connected health platform which has over 77 million registered users already and more than 50,000 doctors.

Customers don't want to defect. Most often, they just want to simplify. They want to do more business with one single firm that really provides them a reason to stay.

Read the Bain Brief: Customer Behavior and Loyalty in Insurance—Global Edition 2016