Ipsos Loyalty - General Insurance Loyalty Report - Australia 2011
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Transcript of Ipsos Loyalty - General Insurance Loyalty Report - Australia 2011
Ipsos Loyalty Industry Reports - 2011 General Insurance – Australia
What is your customer retention & growth strategy?
What follows are highlights of our findings.
What do I need to do to acquire more customers? ACQUISITION
What do I need to do keep the customers I have? CUSTOMER RETENTION
How do I get my current customers to use me for more of their banking products & services? SHARE OF WALLET
Customer Retention
Share of Wallet
Aquisition
We have some ideas. In early 2011 we spoke to 1,000 Australians
about their experiences in insurance with the specific goal of
understanding what was driving their behaviour.
Why did they choose their insurance company? Why are they loyal
to their insurance company? Where are the opportunities to grow
your business with existing customers?
The persistence of smaller, online, budget insurers and weakened consumer confidence post-GFC has maintained a soft insurance market for several years. The increasing number of insurance comparison websites has further added to the commoditisation of general insurance. If decisions are made by counting the number of boxes that are ticked how can we influence consumer choices and create loyal customers ?
The Natural Disaster Insurance Review, including the ongoing debate
around compulsory flood cover, and pressure to provide clearer and
simpler policy documentation is adding further challenges and
potential costs for the industry as insurers seek to provide good cover
at a price consumers are willing to pay. It can be a fine balancing act
between protecting consumers who take out insurance and keeping
insurance affordable to avoid increasing the numbers of consumers
who are either underinsuring or not insuring themselves at all
What will this translate to? Improved cover and more informed
consumer decisions? Increased competition in car insurance?
Pressure on insurers to reduce costs of delivering services and focus
on online channels? Only time will tell.
Despite the current challenges within the industry the
fundamentalsquestions remain the same:
Results in 30 seconds! The key findings you need to take away are: A. For insurance, price is a top of mind consideration but customers also continue to rely on experiences and reputations when choosing their main insurance company B. Top 4 banks lead on share of wallet but trail on almost every other loyalty and satisfaction measure
60%
36%
36%
27%
25%
Price
Previous experience with the brand
Reputation of the company
Quality of products and services
It was convenient at the time
Why did you choose your main insurer?
A Key loyalty measures – Where does
your brand sit? B
Experiences and reputation are key attractors
Loyalty Index Brand preference Likely to stay Recent trend inspend
All insurers AAMI NRMA Allianz GIO
Results in 30 seconds! The key findings you need to take away are: C. NRMA has a high proportion of high value and high loyalty customers making retention a critical issue to
protect and grow profits
D. Normative data can provide crucial contextual information but how do you know if you’re performing well? And if you’re leading the pack locally how do you know if you’re stacking up internationally?
Are your valuable customers at risk? C How does the Australia insurance industry
compare to the rest of the world? D
All insurers AAMI NRMA Allianz GIO
Low value low loyalty Low value high loyaltyHigh value low loyalty High value high loyalty
AUSTRALIA ARGENTINA CHINA FRANCE MEXICO
SATISFACTION BRAND
PREFERENCE
The healthy glow of competition
Loyalty Index Brand preference Likely to stay Recent trend in spend Share of insurance products
All insurers AAMI NRMA Allianz GIO
High levels of loyalty will deliver higher retention, however, we also need to understand how loyalty is distributed across high and low profit customer segments and how loyalty drivers may vary between the two groups.
This will enable you to tailor marketing strategies to build loyalty while maximising the return to your bottom line.
Strong competition from ‘challenger’ brands… We all know that price and products are important and our analyses confirmed this. But what is really interesting is what else is coming together for customers to make them feel that extra bit of loyalty to their insurance company?
After the basics, the most important drivers of loyalty are those things you do to make life easier for your customers and make them feel valued – ease of signing up and renewing their policies, resolving their problems, efficiency in processing their claims and rewarding their loyalty.
Overall customer service
Staff knowledge
Friendliness
Resolve issue
Complaints handling
Ease getting in touch
Range of policies
Ease of signing upEase of renewing
Relevance of policies
Competitive premiums
Clarity of policies
Overall claims handling
Efficiency in processing claims
Loyalty/rewards scheme All Insurers
AAMI (n=181)
NRMA (n=153)
Allianz (n=62)
GIO (N=51)
Where are the opportunities for growth? Sometimes your customer retention & growth strategy isn’t about getting new or keeping existing customers
For many companies the major gains from their customer growth strategy will come from getting their current customers to give them a greater share of their insurance wallet. Car and home insurance are the backbone of the consumer GI business. While there is a high incidence of consolidation there is still some opportunity to build share of wallet through home to motor and motor to home cross-sell campaigns. Growth opportunities also exist in developing offers in the area of Life, Car breakdown and Income insurance.
Around 13% of car insurance and 14% of home insurance policy holders are leaking to other providers
90%
75%
39%
23%
21%
11%
6%
2%
78%
64%
5%
5%
10%
2%
1%
0%
Car insurance
Home insurance
Health insurance
Life insurance
Car breakdown insurance
Income insurance
Travel insurance
Pet insurance
% with product
% with main insurer
Opportunity to grow revenue through offering new products
Customers with 3 or more products are significantly more favourable towards their main insurer in the areas of customer service, being easy to deal with and product factors, key drivers of loyalty.
These findings suggest that these drivers could be strengthened and leveraged to support acquisition and retention strategies.
How many products is enough?
Overall customer service
Staff knowledge
Friendliness
Resolve issue
Complaints handling
Ease getting in touch
Range of policies
Ease of signing upEase of renewing
Relevance of policies
Competitive premiums
Clarity of policies
Overall claims handling
Efficiency in processingclaims
Loyalty/rewards schemeAll Insurers
1 product
2 products
3+ products
Adding customer value to the mix – what do you really stand to gain or lose?
9
Loyalty Index
High value High Loyalty
Low Value High Loyalty Customers
Low Value Low Loyalty Customers
High Value Low Loyalty Customers
Segment size : 31% Segment size : 19%
Segment size : 28% Segment size : 22%
Insurance is one of the few industries where more customers does not always deliver more profits – a disproportionate amount of revenues and profits can come from a small but extremely valuable segment of customers. This is why it is crucial to add a customer value to the mix.
NRMA has a significantly larger proportion of profitable loyal customers. Strategically, insurers should look to protect their high value but vulnerable customers through embedding them with multi-policy and other loyalty offers.
Value & Loyalty Map – All Banks
23 24
15
29 28
31 32 29
37 35
28
33
20
27
31
19
12
35
7 6
All insurers AAMI NRMA Allianz GIO
Low value low loyalty Low value high loyalty
High value low loyalty High value high loyalty
-9
-14
1
6 4
11
1
-3 -1
-4 -6
-4 -4
-17
8 11
AUSTRALIA ARGENTINA CHINA FRANCE MEXICO
What’s the norm? Normative data can provide crucial contextual information – price always rises to the top for consideration and service delivery rates high when looking at retention. How do you know if you’re performing well? And if you’re leading the pack locally how do you know if you’re stacking up internationally?
LOYALTY INDEX BRAND PREFERENCE RECOMMENDATION SATISFACTION
French insurance customers are less satisfied with their main insurer when compared to Australian insurance customers.
Australia’s scores are represented by the blue dotted line and all other scores are relative to Australia.
Insurance customers in Mexico are much more likely to recommend their main insurer when compared to Australian insurance customers.
What’s behind the Ipsos Loyalty Index? Ipsos surveyed 10,000 customers of different brands in different sectors; and surveyed them again a year on. The variables that best predicted Loyalty were used to create the Ipsos Loyalty Index.
Loyalty, from our research and experience, is about attitudes AND behaviour and it is the combination of both of these in the Loyalty Index that provides the extra predictive validity above and beyond single item measures.
Customer Attitudes + Behaviour = Loyalty
ATTITUDINAL LOYALTY
BEHAVIOURAL LOYALTY
Brand preference
Likelihood to stay
Share of business
Recent spending
Loyalty Index
Prediction of 12 month churn
55% 44%
57% 49%
60% 51%
73% 68%
All industries Banking
Loya
lty
Ind
ex
Likelihood to recommend (NPS)
Satisfaction
Likelihood to continue
Loyalty Index
About the research
We surveyed 1,000 Australians and asked them a series of questions aimed at understanding what was driving their behaviour towards their main insurer. Questions included:
• What insurance companies do you currently have a relationship with?
• What insurance company do you consider to be your main insurer?
• What insurance products do you currently own?
• What insurance products do you currently own with your main insurer?
• How well is your main insurer performing across categories like customer
service, having quality products and claims process?
We analyzed this information to answer questions like:
• What is the relationship between customer advocacy and new customer acquisition?
• What are the key drivers of customer retention? • Where are the opportunities for insurance companies to grow
their share of their customers insurance spend?
Let us know if we can help!
Julie Harris | Director, Ipsos Loyalty [email protected] +61 2 9900 5191 - office
Brett Tucker | Managing Director, Ipsos Loyalty [email protected] +61 2 9900 5130 - office