For decades insurers cherished their reputation for conservatism because individual and corporate customers demanded solidity and constancy from the recipients of their premiums and investments. But things have changed. Today, the more conservative insurers are under threat, and innovation has emerged as the key to future success.

The first part of Accenture’s global Consumer-Driven Innovation Insurance Survey 2011 conducted in 13 countries of over 7,000 insurance consumers reveals that 90 percent of consumers are either “very” or “somewhat satisfied” with their insurers. They are fairly satisfied with and have high expectations of their insurance providers, which sounds very promising, but compared with an earlier survey the “satisfied” level has declined by 21 percent since 2009. An other interesting finding is that 33 percent of the respondents in the 2011 survey say they are unlikely to recommend their life insurance providers to others.

No differences between insurers

In the light of these figures, it seems likely that consumers are reporting reasonable satisfaction because their expectations are modest, and because few carriers have blazed new paths to service excellence, rather than because they are delighted with the experience they receive. Consumers generally have a poor understanding of their insurance policies. That is why there is a gap between what consumers expect of insurers and what they believe they receive. With loyalty being frail and new technologies making it easier to compare insurers’ offerings, it is not surprising that 26 percent of customers is considering shopping around for better deals in the next 12 months. Other insights included in the research are:

1. The insurance industry is at a turning point, with clear opportunities for carriers that use consumer-driven innovation to achieve differentiation – there is a broad gap between the things consumers regard as important, and their satisfaction with insurers in these areas.
2. An advanced analytics capability will be key to meeting customers’ expectations of personalized products and services – 76% would be willing to switch to an insurance provider that could offer products and services that were more relevant to them.
3. A robust mobile capability will be essential to the “retailization” of insurance – more than 70% of consumers expect to be using mobile devices in the next two years to interact with their insurer.
4. To attract and retain customers, especially younger ones, insurers will need to invest in next-generation distribution channels – 59% of consumers would be likely to switch providers if their insurer was unable to provide all services across all preferred channels.
5. Consumers in emerging markets are even more interested in innovative products and services than their counterparts in mature markets, and are more prepared to switch providers to gain access to them –  well over 80% would be receptive to new insurance services offered via mobile devices, compared to the global average of 63%.

For many global carriers, expansion into emerging markets is an important part of their growth strategy. The research found that consumers in i.e. India, China and Brazil are less satisfied with their insurance providers than those in the established markets. They are more likely to terminate their relationship with one or more providers and significantly more likely to switch providers to get products that are easier to understand and more relevant to their needs. Even more than in the rest of the world, respondents in these countries are more interested in taking advantage of mobile-enabled services, and are more reliant on the recommendations of others (as disseminated via social media) in selecting new providers.

A different approach in a different world

Traditionally conservative insurers are having to come to terms with two powerful, inter-related trends: ‘Changes in consumer attitudes, perceptions & behavior regarding insurance’ and ‘The rapid emergence & adoption of new technologies which affect insurance’. Together these are forcing insurers to develop new approaches to growth – in particular, to customer acquisition & retention. The key findings of the survey suggest that insurers need to understand the changes that are happening, develop effective strategies to capitalize on these changes and recognize the new capabilities that are needed to implement customer-driven innovation. To keep in step with your customers’ needs, insurers must embrace a multitude of complementary channels and service them via the channels they prefer.

In particular, insurers must rapidly acquire the ability to engage with their customers via mobile devices, provide innovative products and services that take advantage of mobility. Because innovation is the key to customer acquisition and retention in a rapidly evolving marketplace.