Is data gold, or your kryptonite?

If you are an insurer, ask yourself this question: Are your customers sharing data with you? (If you aren’t you probably are customer of insurance, so just ask it the other way around.) Most likely, the answer is “not if they don’t have to”.

Why is that the case? Is it generally privacy concern? Don’t customers trust insurers with their data? Do they see too little benefit in sharing? Or is sharing data on a regular basis simply too much hassle?

These are the questions our latest IBM Institute for Business Value insurance study sought to examine. In “Data: Gold or Kryptonite? An insurer’s guide to the resource of the future” we surveyed close to 16,000 consumers across 24 countries and 4 industries, insurance, retail, auto and consumer electronics. We wanted to know what makes customers willing (or less willing) to share data with their providers in insurance and compared to the other industries. Some of the findings:

• Willingness to share is highly connected to both trust and customer. That correlates well with earlier studies where we found that loyalty and trust themselves were highly connected.
• That means low trust translates to low willingness to share – and only 56 percent of our respondents trust their own insurer. This of course raises the question of why they the other 44 percent don’t switch to another provider. We gave the answer to that in a study two years ago; the simple answer is that trust in the industry is even lower, so customers often don’t really see switching as a good option.
• Less than a third of survey respondents see savings or other monetary compensation for sharing data. Other benefits – better service, improved safety etc – are also not in sight for most.
• Privacy is an issue, and customers do need the feeling that their personal data are well taken care of. More importantly, they want to keep control of their data – the less control they have, the less they are willing to share.

If you put the findings together, the conclusion is that the answer to the questions above is “all of them”. Sharing is about trust, it is about perceiving benefits, and it is about making sharing easy.

The study shows examine each sharing dimension in some detail, and discusses measures that can be taken by insurers to improve. Why do they need to? In a digitally interconnected world, customers are expecting personalization and the individual touch all the way to individually tailored products. Even if many insurers are not prepared to break with the principle of sharing the risk over a large group of people, some form of personal touch will be necessary – and for that you need information about the person.

Download the full study at http://ibm.biz/insurancedata. And feel free to leave me a comment here on the blog.