Two-thirds (67 percent) of insurance customers would consider purchasing insurance products from organizations other than insurers, including 23 percent who would consider buying from online service providers such as Google and Amazon, according to new research by Accenture (NYSE:ACN) based on a survey of more than 6,000 insurance customers in 11 countries.
Forty-three percent of respondents, who could select multiple responses, said they would consider buying insurance from banks, almost one-quarter (23 percent) from online service providers, 20 percent from home service providers, such as telecommunication or home security companies, 14 percent from retailers and 12 percent from car dealers.
“Competition in the insurance industry could quickly intensify as consumers become open to buying insurance not only from traditional competitors such as banks but also from Internet giants,” said Michael Lyman, global managing director for management consulting within Accenture’s Insurance industry practice. “Overall, there is a significant switching risk and we estimate that up to $400 billion in insurance premiums could change hands within the insurance industry over the next 12 months. The switching risk is important in western markets but even more so in emerging countries such as China and Brazil, where insurance customers are even more likely to change providers.”
The research shows that loyalty in insurance is a key issue, with 40 percent of consumers likely to switch to another automobile or home insurance provider over the next 12 months. In the life insurance market, one-quarter (25 percent) of respondents said they were likely to cancel an existing contract and more than one-third (35 percent) said they were likely to take out a new contract with a new provider in the next 12 months.Lower prices and more personalized service are the top reasons for consumers to switch to a new insurer, cited as important or very important in switching decisions by 87 percent and 80 percent, respectively, of the insurance customers surveyed. Forty-one percent of respondents said they were willing to pay more to get personalized advice when purchasing their insurance.