Insurers must embrace digital to improve poor customer relationships: EY survey

80% of Canadian P&C and 76% of life insurance customers are willing to use digital for transactions

TORONTO, Jan. 27, 2015 /CNW/ - High turnover and low trust ratings in the Canadian insurance industry could be countered by nurturing better customer relationships, according to EY's Consumer Insurance Survey: Reimagining customer relationships. Digital communication channels and improved distribution strategies will help insurance companies better connect with consumers and gain market advantage.

"As insurers face challenges in retaining customers, there's work to be done in developing strong mutually beneficial relationships," says Marc-Andre Giguere, EY Partner and Canadian Financial Services Insurance Leader.

According to the survey, only 59% of Canadian consumers trust life insurance companies, the lowest trust rating compared to pharmaceutical companies (61%), car manufacturers (64%) and banks (81%), signaling serious customer relationship issues. The numbers are similar for P&C insurance companies, that have only 56% trust, versus pharmaceutical companies (59%), car manufacturers (68%) and banks (73%).

By nature, insurance products are typically out of sight and out of mind. Insurers have few interactions with customers, making each one a critical opportunity for strengthening customer relationships and building trust. The key to higher trust levels is strong, two-way customer relationships.

"80% of Canadian P&C and 76% of life insurance consumers are willing to use digital and remote channel options for different tasks and transactions. To stay relevant and enhance personal interaction, insurers must develop flexible and multichannel contact options like online chat, video tutorials and mobile apps," Giguere adds.

To improve the effectiveness of existing contact channels and establish more digital options for consumers, insurers should invest time and resources to identify which channels customers want to use and how they want to use them. Pilot programs for specific product lines or regions can help build the business case for updating and optimizing distribution channels and service models.

Insurers can also improve their customer relationships by:

• taking responsibility for the overall health of all customer relationships
• greatly improving their customer intelligence by embracing advanced analytics
• acting predictively, precisely an nimbly in advance of key decision points
• being "easy to deal with" by offering relevant and timely solutions during critical interactions

"Leading Canadian insurers will start reinventing themselves as customer-focused companies to tackle high customer turnover in the short term," says Giguere. "Future industry game-changers such as telematics and wearable technology give even greater reason for change, to help insurers serve the customer of the future."

An infographic of key survey findings is available here.

About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

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About the survey
To provide more insight into current consumer preferences and attitudes, EY surveyed approximately 24,000 people in 30 countries between May and July 2014 about their relationships with insurance providers. Building on the inaugural 2012 survey, this year's survey focused on what matters most to consumers in these relationships, how they interact with their providers and how satisfied they are with a range of offerings from insurers. Along with EY's 2013 Global Insurance Digital Survey and thought leadership concerning customer centricity, these findings present an overview of strategic opportunities and specific tactical choices insurers face in what many industry stakeholders recognize as a new, customer-driven era. For a copy of the report, go to ey.com/insurance.

SOURCE EY (Ernst & Young)