Reimagining customer relationships

Transcription

1 Reimagining customer relationships Key findings from the EY Global Consumer Insurance Survey 2014 Japan

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3 Executive summary Two 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 24,000 consumers 30 countries 50 questions 3

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. 4

5 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. 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). Figure 1: Percentage of consumers citing complete trust and moderate trust by type of business Global total Global Mature Markets Japan Insurance companies 70% 62% 72% Supermarkets 8 86% 83% Online shopping sites 78% 77% 73% Banks 82% 69% 82% Car manufacturers 80% 7 85% Pharmaceutical companies 68% 62% 72% 5

6 Japan: Reimagining customer relationships 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 (5 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%). 6

7 Figure 2: Top reasons for closing or replacing a policy Cost/terms 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 Life* Auto 50% 40% 57% 52% 22% 47% 17% 42% 38% 19% 29% 11% 28% 12% 16% 7% 28% 13% 26% 13% 26% 19% 1 11% 25% 21% 20% 22% 8% 2 11% 11% 7% 2 17% 22% 18% 2% 20% 17% 1% * Includes life insurance and annuities Global total Home 59% 48% 48% 2 39% 15% 3 9% 31% 16% 26% 20% 30% 33% 25% 13% 29% 7% 26% 8% 26% Japan Figure 3: Most important characteristics in ongoing relationships Total Life products Non-life products Independent broker Dedicated agent Direct from the insurance company Value for money 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 47% 5 43% 50% 42% 45% 40% 31% 36% 36% 36% 37% 33% 39% 33% 37% 45% 57% 4 50% 40% 42% 41% 35% 43% 4 35% 40% 33% 41% 29% 28% 50% 51% 43% 49% 45% 48% 39% 26% 30% 28% 35% 3 32% 38% 37% 46% 43% 51% 40% 45% 43% 33% % 35% 40% 45% 32% 47% 40% 41% 38% 42% 46% 60% 4 42% 42% 28% 33% 31% 40% 36% 35% 45% 39% 41% 5 59% % 48% 42% 32% 36% 39% 32% 38% 31% 40% 31% 32% Global total Japan 7

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. 8

9 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) Global total 58% 59% Global mature markets 55% 51% Attrition Closed a policy in the last 18 months 37% 38% 38% Attrition Closed a policy in the last 18 months 28% 21% 19% 0% 25% 50% 75% 100% Advocacy Likelihood to recommend 0% 25% 50% 75% 100% Advocacy Likelihood to recommend Japan Attrition Closed a policy in the last 18 months 43% 38% 29% 17% 2 0% 25% 50% 75% 100% Very Unlikely Unlikely Neutral Likely Very Likely Advocacy Likelihood to recommend 9

10 Japan: Reimagining customer relationships Figure 5: Global policy closure rates (attrition) within last 18 months, by advocacy level (likelihood to recommend) life vs. non-life Total life 36% Attrition Closed a policy in the last 18 months 28% 2 0% 25% 50% 75% 100% Advocacy Likelihood to recommend 12% 29% Very Unlikely Unlikely Neutral Likely Very Likely Total non-life 5 Attrition Closed a policy in the last 18 months 48% 3 0% 25% 50% 75% 100% Advocacy Likelihood to recommend 20% 17% Very Unlikely Unlikely Neutral Likely Very Likely 10

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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. 12

13 Compared to both global (56%) and mature markets (4), 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 (4 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. Claimsrelated inquiries had a low 7%, compared to 17% in other mature markets. Figure 6: Customer interactions during the last 18 months global totals Global current Global mature None 4 At least one 56% None 56% At least one 4 Japan current At least one 26% None 7 13

14 Japan: Reimagining customer relationships 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 (2) Japanese customers experiencing a moment of truth report a positive, salesrelated 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 14

15 Figure 7: Reasons for contact and outcomes across different phases of the customer life cycle relationship Education and research Decision and purchase Maintenance and service Claims Close or renewal Inquire about obtaining a new type of insurance 25% 57% Obtain information about the policy 13% 3 Follow up on the status of a claim 31% Inquire about replacing an existing policy 18% Inquire about switching a policy from another provider 35% 52% 4 Positive Neutral Negative 3 8% 20% 58% Obtain a new policy 17% 63% Update information, such as my address 26% 7 41% 35% Dispute the resolution of a claim 6% 5 20% Questions about a premium increase 21% 9% 46% 59% Figure 8: Moment of truth outcomes 41% 28% 2 22% 28% 20% 31% 2 27% 30% 22% 11% 6% Global total 10% 7% Global mature 7% 13% 3% 1 20% 8% Positive outcome Negative outcome Neutral 7% 16% Japan Current Former Life and annuities 8% 9% 6% 11% 7% 9% 9% 9% 15% 9% Auto Home Broker Agent Direct 15

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 () express a high level of satisfaction. 16

17 In general, Japanese customers are highly critical of the communications they receive from their insurers only one-in-25 () 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% 43% 28% 37% 42% 45% 38% 39% 46% Global total Global mature Japan Current Former Life and annuities Auto Home Broker Agent Direct 17

18 Japan: Reimagining customer relationships Figure 10: Percentages of consumers very satisfied (by frequency of communication) General information More than once a year Japan 6% Independent broker Dedicated agent 1% Direct 9% Once a year or less 3% 3% 0% Special deals/promotions More than once a year 6% 3% 11% Once a year or less 1% 7% Policy updates More than once a year 5% 9% 0% 5% Once a year or less 5% 2% 8% Figure 11: Percentages of consumers preferring semiannual communications vs. delivery of actual communications (by purchase source or distribution channel) Current Preferred Current Preferred Current Preferred Current Preferred Current Preferred Current Preferred 17% 1 7% 11% 29% 27% 22% 19% 3 43% 45% 43% 21% 23% 49% 30% 35% 55% 27% 26% 46% 30% 31% 4 62% 63% 40% 4 48% 46% 4 27% 2 27% 3 13% General information Special deals/promotions Policy updates General information Special deals/promotions Policy updates More than once a year Once a year or less Never 18

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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. 20

21 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 sixof-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, 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 inquiries 25% 75% 23% 39% 38% 65% 27% 3% 2% 4 18% 33% 4 22% 31% 3% 29% 10% 58% 23% 48% 12% 17% 27% 39% 3 18% 3% 78% 3% 11% 29% 8% 49% 2% 22% 29% 28% 19% 2 21% 55% 3% 23% 4 26% Reported a problem with policy In person Changes to portfolio Website Changing vehicles on policy Decrease coverage Phone Researched policies to replace current Changes how policy is paid To learn about other non-insurance product offerings Sought financial advice Options to reduce premiums File claim Changes to personal details Increase coverage General information about policy Mail 21

22 Japan: Reimagining customer relationships 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% 35% 43% 27% 35% 29% 38% 33% 30% 24-hour 27% 39% 25% 4 22% 29% 27% 28% telephone hotline Mobile app 10% 12% 9% 13% 1 13% 9% 7% Interactive support 18% 19% 1 18% 16% 21% 1 10% Video tutorials and guides None of the above 13% 10% 7% 12% 15% 11% 6% 3% 35% 26% 43% 25% 35% 29% 35% 41% Shaded areas indicate areas of interest, relatively high percentage of consumer consideration. 22

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24 EY Assurance Tax Transactions Advisory 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. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Contacts Nobuaki Nakata Japan Managing Director Financial Advisory Services nobuaki.nakata@jp.ey.com Peter R. Gaydon Partner - EY Japan Financial Services Office gaydon-ptr@jp.ey.com EYGM Limited. All Rights Reserved. EYG No. EG ED 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. ey.com