Reimagining customer relationshipsKey findings from the EY Global Consumer Insurance Survey 2014
Japan
2
3Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
24,000
consumers
30
countries
Executive summaryTwo years after EY’s inaugural Global Consumer Insurance Survey, results from the 2014 survey confirm that the insurance industry faces the same type of digital-driven and consumer-led disruption that retail, banking, media and entertainment and other sectors have experienced. Indeed, it seems clear that insurers have much work to do in delivering the customized experiences, intuitive toolsets and easy information access that today’s informed and empowered customers require.
Our survey results confirm that insurance customers are unique in many ways. In Japan, “value for money” is viewed as the most important characteristic for ongoing customer relationships–ranking higher than the global average. There are huge differences in response to customer interaction, frequency of communication and customer satisfaction, with the Japanese reporting lower levels of satisfaction than either global or mature markets.
This regional overview is to be read in conjunction with the Global Consumer Insurance Survey 2014 report – responses from 24,000 consumers in 30 countries. It provides a snapshot of more detailed findings for Japan and compares some of our global findings with the survey data.
Look for the report at ey.com/insurance/GCIS2014 and check out our interactive tool to dip deeper into the findings.
Nobuaki Nakata Japan Managing Director Financial Advisory Services
50 questions
4
Key finding 1:
High turnover and low trust signal serious relationship issues. Nearly three-in-four Japanese insurance customers (72%) express complete or moderate trust in insurance companies.
5Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
Nearly three-in-four Japanese insurance customers (72%) express complete or moderate trust in insurance companies, which is higher than the global average. While this represents the strong majority of customers, insurance companies overall register a lower level of trust than other targeted industries. And, this finding is consistent with results across all mature markets.
Figure 1: Percentage of consumers citing “complete trust” and “moderate trust” by type of business
Japanese customers offer fewer reasons than their global counterparts to close or replace their insurance policy. Depending on the product in question, the Japanese cite between 1.5 (auto) and 2.0 (homeowners) reasons, while the figures for global customers, on average, are nearly twice as high (auto 2.7 vs. homeowners 3.7).
70%Insurance companies
84%
78%
82%
80%
68%
62%
86%
77%
69%
74%
62%
72%
83%
73%
82%
85%
72%
Supermarkets
Online shopping
sites
Banks
Car manufacturers
Pharmaceutical companies
JapanGlobalMature Markets
Global total
6
Japan:Reimagining customer relationships
Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
Clearly, “value for money” represents the most frequently expressed reason to close or replace a policy (which is consistent with global findings). However, other top reasons appear more driven by obtaining products that were a better fit (such as policy benefits/coverage, 22%; research conducted, 21%; and a policy that was not aligned to life circumstances, 19%) than with the experiences provided by the insurer.
When asked about the most important characteristics in a relationship with insurers, three stand out among the rest. “Value for money” was the most important among a majority of customers (54% vs. 47% global), while “easy to understand, clear communications” and being “easy to deal
with” ranked second and third (50% and 45%, respectively). “Value for money” was considered even more important for relationships regarding life products (57%) and when purchasing directly from an insurance company (59%).
The ability to provide information in a manner consistent with customer preferences is more important to Japanese customers than global customers (39% vs. 33%) – and cuts across products and sales channels. In contrast, a strong brand reputation appears less important to Japanese customers, though life customers (35%) place greater value on brand reputation than do non-life customers (26%).
7Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
Figure 2: Top reasons for closing or replacing a policy
Figure 3: Most important characteristics in ongoing relationships
50%Cost/terms
47%
38%
28%
28%
26%
Life*
25%
24%
24%
22%
20%
40%
22%
19%
12%
13%
19%
21%
8%
7%
57%
42%
29%
16%
26%
14%
20%
11%
17%
18%
17%
52%
17%
11%
7%
13%
11%
22%
11%
4%
4%
4%
2%
1%
59%
48%
39%
34%
31%
26%
30%
25%
29%
26%
26%
48%
24%
15%
9%
16%
20%
33%
13%
7%
8%
4%
Policy benefits/coverage
Recommended by broker, friends
Frequency/relevance of communication
Level of service received
Policy did not align to my life circumstances
Research I conducted
Experienced personal/family milestones
Brand reputation
Did not like the way claim was handled
Customer loyalty benefits
*
Auto Home
Global totalIncludes life insurance and annuities Japan
47%Value for money
Total
Easy to understand, clear communication
Easy to deal with
Strong brand reputation
Financial stability of insurance company
Recommended policy best for my needs/budget
Provided information the way I wanted it
Responsive
43%
42%
40%
36%
36%
33%
33%
54%
50%
45%
31%
36%
37%
39%
37%
Life products
Non-life products
Independent broker
Dedicated agent
Direct from the insurance company
45%
44%
40%
41%
43%
35%
33%
29%
57%
50%
42%
35%
44%
40%
41%
28%
50%
43%
45%
39%
30%
35%
32%
37%
51%
49%
48%
26%
28%
34%
38%
46%
43%
40%
43%
34%
28%
40%
32%
40%
51%
45%
33%
34%
35%
45%
47%
41%
38%
46%
44%
42%
33%
40%
35%
39%
42%
60%
42%
28%
31%
36%
45%
41%
54%
44%
42%
42%
36%
32%
31%
31%
59%
44%
48%
32%
39%
38%
40%
32%
Global total Japan
8
Key finding 2:
Just because they leave you doesn’t mean they don’t love you.Only 30% to 40% of Japanese customers are willing to recommend their insurance to friends and relatives.
9Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
Key finding 2:
Just because they leave you doesn’t mean they don’t love you. Overall, there does not appear to be a strong association
between the levels of advocacy expressed by Japanese customers and reported attrition, particularly when evaluated within the context of other mature markets and among life product customers. Further, the level of advocacy reported is extremely low, especially for life customers. Only 30% to 40% of Japanese customers are willing to recommend their insurance to friends and relatives. These results continue to support the suggestion that advocacy may be an insufficient measure for products in which customers have minimal interaction or engagement.
Figure 4: Global policy closure rates (attrition) within last 18 months, by advocacy level (likelihood to recommend)
AdvocacyLikelihood to recommend
Att
riti
onCl
osed
a p
olic
y in
the
last
18
mon
ths
38%38%37%
59%58%
0% 100%25% 50% 75%
AdvocacyLikelihood to recommend
Att
riti
onCl
osed
a p
olic
y in
the
last
18
mon
ths
19%21%28%
51%55%
0% 100%25% 50% 75%
AdvocacyLikelihood to recommend
Att
riti
onCl
osed
a p
olic
y in
the
last
18
mon
ths
24%17%
29%
38%43%
0% 100%25% 50% 75%Very Likely
Likely
Neutral
Unlikely
Very Unlikely
Global total Global mature markets
Japan
10
Japan:Reimagining customer relationships
Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
Figure 5: Global policy closure rates (attrition) within last 18 months, by advocacy level (likelihood to recommend) – life vs. non-life
AdvocacyLikelihood to recommend
29%
12%
24%
28%
36%
Att
riti
onCl
osed
a p
olic
y in
the
last
18
mon
ths
0% 100%25% 50% 75%Very Likely
Likely
Neutral
Unlikely
Very Unlikely
AdvocacyLikelihood to recommend
17%20%
34%
48%
54%
Att
riti
onCl
osed
a p
olic
y in
the
last
18
mon
ths
0% 100%25% 50% 75%Very Likely
Likely
Neutral
Unlikely
Very Unlikely
Total life
Total non-life
11Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
12
Key finding 3:
Insurers have so few interactions with their customers that each one becomes a critical moment of truth. Japanese customers report experiencing a “moment of truth” at comparable rates with customers across other mature markets.
13Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
Compared to both global (56%) and mature markets (44%), few Japanese customers (only 26%) report interactions with their insurer. Given this low number, each interaction to gather information about policy and coverage becomes a more important opportunity to leave a lasting impression on the customer. These experiences can be described as “moments of truth.”
Japanese customers report experiencing a moment of truth at comparable rates with customers across other mature markets (44% vs. 45%, respectively). The percentage is higher by 9% compared to other markets when obtaining information about an existing policy and lower by 10% when obtaining information about a potential “new” policy. Claims-related inquiries had a low 7%, compared to 17% in other mature markets.
Figure 6: Customer interactions during the last 18 months – global totals
Figure 6:
None 44%
At least one 44%
None 56%
At least one 26%
None 74%
At least one 56%
Figure 6:
None 44%
At least one 44%
None 56%
At least one 26%
None 74%
At least one 56%
Global current Global mature
Japan current
14
Japan:Reimagining customer relationships
Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
In contrast to global results, Japanese customers are less likely to have a moment of truth with a positive outcome. Instead, they are more likely to report outcomes considered “neutral” as opposed to “negative.” Local results indicate customers are more critical of events that occur later in the customer experience (claims and close or renewal) than those found earlier.
Overall, about one-in-four (24%) Japanese customers experiencing a moment of truth report a positive, sales-related outcome. These levels may be slightly lower than results from all mature market customers (28%). Life customers (20%), as well as those buying directly from insurers (22%), report lower levels of sales-related outcomes than their global counterparts.
Definitions throughout the report:
Moments of truth = an interaction or experience that positively or negatively changed the customer’s perception of their insurer or broker
Positive outcomes = coverage increases, the opening of new policies or higher favorability ratings from the consumer
Negative outcomes = coverage reductions, policy closures or lower favorability ratings
15Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
Figure 8: Moment of truth outcomes
Figure 7: Reasons for contact and outcomes across different phases of the customer life cycle relationshipFigure 7:
57%
Positive
Neutral
Negative
Inquire about obtaining a new type of insurance
Education and research Decision and purchase Maintenance and service Claims Close or renewal
Inquire about switching a policy from another provider
Obtain a new policy
Obtain information about the policy
Update information, such as my address
Follow up on the status of a claim
Dispute the resolution of a claim
Inquire about replacing an existing policy
Questions about a premium increase
25%
18%
58%34%
8%
63%
20%
17%74%
26%
52%35%
13%
31%
35%
34%
6%
41%54%
59%20%
21%
46%
9%
44%
Figure 8:
6%
11%
41%
7%
10%
28%
13%
7%
24%
16%
7%
20%
14%
3%
22%
8%
20%
28%
9%
9%
31%
9%
6%
24%
9%
11%
27%
9%
7%
22%
15%
8%
30%
Positive outcome Negative outcome Neutral
Global total
Global mature
Japan Current Former Life andannuities
Auto Home Broker Agent Direct
Japan
16
Key finding 4:
Consumers want more frequent, meaningful and personalized communications. In general, Japanese customers are highly critical of the communications they receive from their insurers–only one-in-25 (4%) express a high level of satisfaction.
17Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
In general, Japanese customers are highly critical of the communications they receive from their insurers–only one-in-25 (4%) express a high level of satisfaction. One way in which communications can be improved is to increase the frequency. Globally, most customers report a preference to receive at least two communications per year. While Japanese customers prefer to receive more frequent, relevant communications from their insurers, the most common frequency level is annually. And, nearly half of Japanese customers prefer not to receive any communications regarding general information or
special deals and promotions. The implication for insurer communications is similar to customer-based interactions: they will not occur frequently. Therefore, every connection needs to deliver a strong, positive message.
Globally, there appears to be an association between the level of communication frequency and satisfaction. That association does not appear to exist among Japanese customers, as satisfaction does not appear to be influenced by the frequency of communication.
Figure 9: Consumer satisfaction with outbound communications
60% 60%
40%37%
43%
28%
42%45%
38%
46%
39%
Global total
Global mature
Japan Current Former Life andannuities
Auto Home Broker Agent Direct
18
Japan:Reimagining customer relationships
Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
Figure 11: Percentages of consumers preferring semiannual communications vs. delivery of actual communications (by purchase source or distribution channel)
Figure 10: Percentages of consumers very satisfied (by frequency of communication)
Figure 10:
More than once a year Once a year or less Never
Current Preferred Current Preferred Current Preferred Current Preferred Current Preferred Current Preferred
40%
34%
26%
27%
43%
30%
44%
29%
27%
24%
45%
31%
27%
27%
46%
13%
43%
44% 62%
17%
21%
48%
22%
30%
63%
14%
23%
46%
19%
35%
44%
7%
49%
34%
11%
55%
General information
Policy updatesSpecial deals/promotions
General information
Policy updatesSpecial deals/promotions
6%More than once a year
Japan
Once a year or less 3%
6%
4%
5%
4%
Independent broker
Dedicated agent
Direct
4%
3%
4%
4%
1%
0%
3%
1%
0%
2%
9%
5%
9%
4%
11%
7%
5%
8%
More than once a year
Once a year or less
More than once a year
Once a year or less
General information
Special deals/promotions
Policy updates
19Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
20
Key finding 5:
As consumers embrace digital, insurers must rethink their distribution strategies and partner relationships. The phone was the primary contact method most frequently mentioned by Japanese customers, and was cited in seven-in-13 transactions or inquiries.
21Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
There appears to be some strong, clear connections regarding the type of contact method that should be used for different transactions or inquiries. Global customers place significant emphasis on single contact methods (most often in-person contact); however, Japanese customers identified three different primary contact methods across the 13 transactions or inquiries shown in figure 12.
The phone was the primary contact method most frequently mentioned by Japanese customers, and was cited in six-of-13 transactions or inquiries. For most of these, there is a 20-point gap between telephone levels and those expressed for the next common contact method. In-person contact was identified as the most frequently used contact method for four of the 13 transactions or inquiries. While there were fewer instances in which this option is considered
“primary,” the gap between the first and second most frequently used option is nearly 30 points. For the remaining two transactions or inquiries, websites were listed as the preferred contact method. The usage gap between this and the next most frequently used option, which in both instances is in-person contact, is nine percentage points.
Given their very strong habits and preferences, Japanese customers appear far more resistant to consider alternate digital or remote options for a specific transaction or inquiry. Depending on the nature of these, between one-quarter (claims assistance, 25%) and two-fifths (policy cancellation, 41%; and seeking financial advice, 43%) would not select any digital/remote option. Among those who would consider such an option, email and a 24-hour telephone hotline consistently ranked as the top two, with the former selected as the primary option for seven-of-eight transactions and inquiries.
Figure 12: Consumer use of channels/information sources for different types of transactions and inquiriesFigure 12:
26%
3%
23%
44%
Gen
eral
info
rmat
ion
abou
t pol
icy
In person Website
55%
24%
21%
19%
22%
29%
28%49%
29%
3%
8%
78%
18%
3%
34%
27%
39%
17%
48%
23%
12%58%
3%
29%
10%
31%
44%
4%
22%
33%
44%
3%2%
18%
27%
65%
4%
4%
38%
23%
39%
75%
25%
Incr
ease
cov
erag
e
Chan
ges
to
pers
onal
det
ails
File
cla
im
Opt
ions
to
redu
ce
prem
ium
s
Soug
ht fi
nanc
ial
advi
ce
To le
arn
abou
t ot
her
non-
insu
ranc
e pr
oduc
t off
erin
gs
Chan
ges
how
po
licy
is p
aid
Rese
arch
ed
polic
ies
to
repl
ace
curr
ent
Dec
reas
e co
vera
ge
Chan
ging
ve
hicl
es o
n po
licy
Chan
ges
to
port
folio
Repo
rted
a
prob
lem
with
po
licy
Phone
Mail Email
4%11%
2%
22
Japan:Reimagining customer relationships
Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
Figure 13: Percentages of consumers who would consider using these contact methods (assuming they were available) when interacting with their insurance company
Inquire about new insurance policy
Questions about an existing policy
Seeking financial advice
Assistance with a claim
Researching different types of insurance
Managing your current policy
Renewing your policy
Cancel my policy
Web chat 21% 20% 21% 23% 13% 18% 12% 10%
Email 35% 43% 27% 35% 29% 38% 33% 30%
24-hour telephone hotline
27% 39% 25% 44% 22% 29% 27% 28%
Mobile app 10% 12% 9% 13% 14% 13% 9% 7%
Interactive support
18% 19% 14% 18% 16% 21% 14% 10%
Video tutorials and guides
13% 10% 7% 12% 15% 11% 6% 3%
None of the above
35% 26% 43% 25% 35% 29% 35% 41%
Shaded areas indicate areas of interest, relatively high percentage of consumer consideration.
23Reimagining customer relationships | Key findings from the EY Global Consumer Insurance Survey 2014 | Japan
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EYG No. EG02101405-1259278ED 0115
This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
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ContactsNobuaki NakataJapan Managing DirectorFinancial Advisory [email protected]+813 3503 1100
Peter R. GaydonPartner - EY JapanFinancial Services Office [email protected]+813 3503 2998
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