Random Thoughts: Watching the English (and Americans, and Australians…)

Today we will take another look at the most recent IBM Institute for Business Value (IBV) study on insurance customer retention, “Capturing hearts, minds and market share“. I’ll be focusing on some country level information, specifically the Anglo-Saxon countries in the study, i.e. the U.K., the U.S., Canada and Australia. [1]

I’ve pointed out some U.K. data before; if customer behaviors in insurance correlate to cultural factors, how do these data compare to culturally ‘closer’ countries? First, let’s look at why customers switch, and here just the overall top two factors plus price:

All countries except the U.K. are fairly close to the global averages – higher for price and mostly lower for service. I was actually quite surprised by the low percentage on the “poor service” answer by the U.K.; looking back at the “Trust, transparency and technology” study from 2008, U.K. customers were pretty vocal about that point. Looks like large steps in improvement have been made! (Or not: maybe it’s not worth switching over…)

What about trust?

Trust in the industry is pretty much in line everywhere. For personal trust in one’s own insurer, the U.S. beats the other countries by a nice margin. Fits with the observation above that U.S. customers tend to switch less on price – there seems to be an inverse relationship here.[2]

As a third data point – since the last two Random Thoughts were IoT and data-related, let’s look at that: how much would customer accept IoT data use by their insurers? Let’s just look at millennials, who are the most accepting:

Considering the conventional wisdom about data sharing, these numbers are pretty low.[3] Again, it’s consistent with earlier observations – the international average is elevated a lot by developing countries, where the whole matter of mobile usage and data sharing is very much advanced compared to mature markets. Still, even if these numbers look low – if insurers can find out which customers are open to data sharing, the markets are big enough that this is a critical mass. I’d say go for it.

[1] If you are curious about the title of this post and interested in cultural anthropology: there is a fascinating – and hilarious – book by Kate Fox where she watches the English…

[2] Note that you can’t directly compare the two trust series; trust in the industry was measured as a yes/no-question, whereas for trust in own insurer I am only showing the 5+6 answer on a 1-6 scale. Ca. half of the sample is neutral in trust, i.e. answers 3 or 4.

[3] Also, customer might not feel comfortable but still think sharing is inevitable; check out this interesting study: http://betanews.com/2015/06/07/internet-users-are-powerless-to-protect-their-privacy-and-they-know-it/