Here’s a scary thought. Some $400 million in insurance purchase dollars could end up in the hands of banks and other outlets and not in insurance coffers. This is a conclusion from a survey done by management consultant Accenture.
• 67% are open to purchasing insurance from firms that are not insurers.
• 23% think they might buy from online service providers like Google or Amazon.
Accenture’s Michael Lyman put the survey in perspective and insurers need to know that competition is likely to quickly intensify. “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.”
Breaking the survey down, Lyman said:
• 43% will consider buying insurance from banks.
• 23% from online providers — as noted earlier.
• 20% from home service providers.
• 12% from car dealers.
People are definitely in a shopping mood:
• 40% will likely switch auto or home carriers in the next year.
• 25% will likely cancel life insurance contracts in the same time period.
• 35% will take out a new contact with a new provider in the next year.
• 87% cite lower prices as the reason for considering change.
Here is some good news for independent and captive insurance agents:
• 80% like more personalized service.
• 41% are willing to pay more for that personalized insurance service.