In a recent study conducted by Capco, the global technology and management consultancy, it was found that just 15% of UK consumers use a single insurer for all their policy needs.
The research highlights both a challenge and an opportunity for insurers, as loyalty levels remain low, but there is a clear desire among customers for personalised insurance options and a willingness to share additional personal data.
The survey, which targeted 1,000 UK insurance policyholders between the ages of 18 and 65, unveiled that younger adults (aged 18-34) were more likely to use a single insurance provider (21%) compared to their older counterparts (11% for those aged 55-65).
However, this presents a fertile ground for insurers to establish long-term loyalty with the younger demographic by expanding their relationships beyond a single policy.
Among the key factors driving policy purchasing decisions, respondents cited “value for money” as the most crucial factor, with 59% considering it paramount. The reputation of the insurance provider ranked second, with 47% of respondents deeming it most important when selecting an insurer.
The study also delved into consumers’ preferences for personalised insurance products. Approximately three-quarters of respondents expressed a desire for more personalised long-term savings products and health and income protection offerings. Younger adults showed a stronger inclination towards personalised home, pet, and car insurance compared to older adults.
Furthermore, the survey demonstrated a surprising willingness among respondents to share additional personal data with insurers, with 81% open to doing so. Interestingly, a smart device at home emerged as the preferred method for sharing such data, as chosen by 37% of respondents. However, only 18% were inclined to share their social media data with insurers.
Matt Hutchins, Partner and UK & Global Insurance Lead at Capco, emphasised that trust is pivotal for insurers to build long-term relationships with their customers.
He suggested leveraging various powerful tools such as core tech modernisation, omnichannel experiences, cloud and AI, and innovative data capturing and management approaches to strengthen this trust and deliver the personalised experiences customers crave.
With UK consumers more likely to self-purchase insurance and utilise independent websites or portals, insurers face challenges in differentiating themselves and building loyalty.
However, the findings indicate an opportunity for insurers to embrace digitalisation and tailor their products and services to meet customers’ evolving needs, ultimately gaining a competitive advantage in the market.
Lance Levy, CEO of Capco, concluded that the research reveals a shift in customer preferences, presenting significant opportunities for UK insurers to capitalise on emerging trends and foster greater customer engagement and loyalty.
