The challenge insurers face as consumers more likely to self-purchase cover online

Insurers face a challenge in enhancing relationships with consumers, with more than half opting to purchase cover through an independent website or portal.

That was according to technology and management consultancy Capco, which found that 49% of UK customers are more likely to self-purchase insurance – compared to 26% on average across Europe.

Out of those that would prefer to self-purchase cover, 54% said they would do so via an independent website or portal.

”These are challenges for UK insurers as they look to stand out to – and build loyalty with – consumers, as they present a hurdle in establishing closer relationships with customers and delivering the greater personalisation consumers want,” Capco said.

These results were published in Capco’s UK insurance survey 2023, which was released today (17 July 2023).

The firm surveyed 13,750 policyholders aged 18 to 65 across the UK, US, Switzerland, Germany, Belgium, Poland, Italy, Canada, Brazil, Hong Kong, Greater Bay Area (ex Hong Kong), Singapore, Thailand and Malaysia during February and March 2023.

When it came to choosing a provider, 47% of consumers said that an insurer’s reputation mattered most – beating ease of the application process (42%), scope of insurance coverage (37%) and speed of service (34%).

Matt Hutchins, partner and UK and global insurance lead at Capco, said that “trust is everything” for insurers.

“To build and cement that trust in the long term, [insurers therefore] need to ensure they are not only set up to understand their customers and their needs but can also service those needs at the right time and through the right channels.”

Data sharing

Meanwhile, almost three-quarters (74%) of respondents expressed a desired for more personalised long-term saving products – such as investment-linked insurance, annuities and endowments.

And 70% wanted more personalised health and income protection products.

“UK consumers are increasingly comfortable with digitalisation, are interested in more tailored products and services and are prepared to share more information about themselves to achieve benefits, including cheaper premiums and greater personalisation,” said Capco’s chief executive Lance Levy.

When it came to data sharing, Capco’s survey found that 81% of respondents were willing to share additional personal data with insurers, with 37% highlighting that the preferred method for sharing such data was a home smart device.

Around 28% were willing to wear a smart watch or other wireless technology for insurance purposes, while 25% selected the option of a black box in their vehicle.

Only 18% were inclined to share their social media data, however.

“Insurers do have a range of powerful levers at their disposal, including core tech modernisation, omnichannel experiences, cloud and AI [artificial intelligence] and innovative approaches to capturing, managing and applying data enabled by modern data platforms,” said Hutchins.

Levy added: “Our survey highlights the opportunities for UK insurers and also the potential challenges they face as they look to capitalise on those trends to build greater customer engagement and loyalty.”