LONDON, July 17, 2023 - Insurers face both a challenge and an opportunity around enhancing levels of customer loyalty, according to new research from Capco, the global technology and management consultancy. The survey of 1,000 UK insurance policyholders aged between 18 and 65 years old found that only 15% of respondents use the same insurance company for all their policy needs.
Younger adults (aged 18-34) – a priority target demographic for insurers – are more likely to use a single insurance provider (21%), compared to only 11% of older adults (aged 55-65) and 14% of middle-aged adults (aged 35-54 years). While this reflects that double the number of younger adults have just one insurance policy (38%) compared to older adults (19%), there is clear opportunity for insurers to build on this initial single point of engagement to foster more expansive relationships and long-term loyalty with this age group.
Capturing consumers’ habits and attitudes to insurance and insurers, Capco’s UK survey illustrates the difficulties insurers face in growing market share, as well as the complex interplay of factors impacting consumer decisions to buy insurance and choose the right provider.
Lance Levy, CEO of Capco, said: “UK consumers are increasingly comfortable with digitalization, are interested in more tailored products and services, and are prepared to share more information about themselves to achieve benefits, including cheaper premiums and greater personalization. Our survey highlights the opportunities for UK insurers, and also the potential challenges they face as they look to capitalise on those trends to build greater customer engagement and loyalty.”
Matt Hutchins, Partner and UK & Global Insurance Lead at Capco, said: “For insurers, trust is everything. To build and cement that trust in the long term, they need to ensure they are not only set up to understand their customers and their needs but can also service those needs at the right time and through the right channels. Insurers do have a range of powerful levers at their disposal, including core tech modernization, omnichannel experiences, cloud and AI, and innovative approaches to capturing, managing and applying data enabled by modern data platforms.”
Purchasing channels and motivations
UK consumers are more likely to self-purchase insurance (49%) than insurance customers in mainland Europe (average of 26% across the five Continental European markets also surveyed), and to do so via an independent website or portal (54%). These are challenges for UK insurers as they look to stand out to – and build loyalty with – consumers, as they present a hurdle in establishing closer relationships with customers and delivering the greater personalisation consumers want.
Personalization and data sharing
Drilling down into customer preferences, almost three-quarters (74%) of respondents express a desire for more personalised long-term savings products (such as investment-linked insurance, annuities, and endowments) and 70% want more personalised health and income protection products.
Capco’s 2023 UK insurance survey can be downloaded here. Further national market reports will be published in the coming weeks. Capco’s latest global insurance survey was conducted during February and March 2023 and collected responses from 13,750 policyholders aged 18 to 65 years across the UK, Switzerland, Germany, Belgium, Poland, Italy, the US, Canada, Brazil, Hong Kong, Greater Bay Area (ex Hong Kong), Singapore, Thailand, and Malaysia.
Capco, a Wipro company, is a global technology and management consultancy specializing in driving digital transformation in the financial services industry. With a growing client portfolio comprising of over 100 global organizations, Capco operates at the intersection of business and technology by combining innovative thinking with unrivalled industry knowledge to fast-track digital initiatives for banking and payments, capital markets, wealth and asset management, insurance, and the energy sector. Capco’s cutting-edge ingenuity is brought to life through its award-winning Be Yourself At Work culture and diverse talent. To learn more, visit www.capco.com or follow us on LinkedIn, Instagram, Facebook, and YouTube.
Our 2023 UK Insurance Survey captures responses from 1,000 policy holders. These survey findings inform insights and recommendations from Capco's local insurance experts on the key roles of data and personalisation.
Read the full report