Innovation in Insurance: A UK Consumer View

by Craig Weber,  Jamie Macgregor,  Michael Fitzgerald, November 29, 2012
Industry Trends
EMEA

Abstract

For most insurance companies, innovation in service technology is necessary in order to deliver consumers’ service requirements. In the UK, online service via the home computer (81% extensive or occasional use) and phone-based call centres (63% extensive or occasional use) are an established part of the customer service landscape. However, is this what consumers expect to continue using in the future?  What are their expectations of innovation in customer service? Which innovations will carry the most value for insurers?

In the report Innovation in Insurance: A UK Consumer View, Celent provides insights on what technologies UK consumers are using today for customer service, what their expectations are for innovation in customer service, and their preferences when selecting a financial services provider. This report draws on the findings of a survey of 306 consumers from the United Kingdom.

Key findings explored in the report include:

  • UK consumers continue to use a wide variety of technology options in their service interactions. However, UK consumers still heavily rely on the home computer (81%) and the telephone landline (63%) for either extensive or occasional use. Mobile access for customer service (39%) has yet to fully take off.
  • Wealthy households with an income above £100,000 per annum show an increased propensity to use online self-service channels (48% average across simple and complex transactions) over “face-to-face” transactions (19% average across simple and complex transactions). Households with an income less than £100,000 prefer to use “face-to-face” for complex transactions (39%) and online self-service for simple transactions (48%).
  • UK consumers prefer service methods that offer maximum ease of use (26%), personalisation that includes a “human touch” (22%), and convenience (15%).

The survey also provides insights concerning the factors that drive a consumer’s choice of financial services provider. Price and product lead the selection criteria, with innovation in product and service ranking as a high determinant. Survey results demonstrate that a reputation of innovation influences consumer choice in financial services.

“These survey results provide a fascinating look into how consumers engage with insurers today and where their preferences lie for future engagement,” says Jamie Macgregor, Senior Analyst with Celent’s Insurance Group and coauthor of the report. “One of the biggest surprises was the continued importance consumers placed on human interaction and how this changes with wealth. The results appear to indicate that the wealthier you are, the more comfortable you are with self-service and, conversely, the less wealthy you are, the more help you require when it comes to complexity. This reinforces the need for a deeper understanding about what customers’ really value when servicing their products as part of proposition development.”

This report supports and challenges commonly held assumptions about customer experience requirements. It examines results from the survey around current technology usage for servicing financial products, consumer preferences, and attitudes towards innovation. Finally, a high-level recommendation for potential next steps is provided for both insurers and technology firms working with them.

This 26-page report contains 14 figures and 4 tables.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Erica Ferguson
eferguson@celent.com
Tel.: +1 617 262 8225

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

1

Introduction

3

 

Background

3

 

Methodology

4

 

Comparison Between US and UK Survey Participants

6

A Context for Innovation

8

 

Tool Use

8

 

Catering to Active Users

9

 

Complex Vs. Simple Transactions

10

 

Convenience, Ease, and Speed

11

 

Accommodating Wealth

13

The Business Case for Insurance Innovation

15

 

Choosing a Financial Services Provider

16

Conclusion

20

Leveraging Celent’s Expertise

21

 

Support for Financial Institutions

21

 

Support for Vendors

21

Related Celent Research

22

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