Life insurance buyers in India are surprisingly well aware of their needs and proactively research their options,according to Ernst & Young’s global insurance survey 2012.
About 74 per cent of respondents indicate that they conduct detailed research before buying life and pensions policies,far more than in the UK (37 per cent),the US (31 per cent) or China (44 per cent),it points out.
However,many customers focus more on price competitiveness in their research rather than product features and performance.
E&Y surveyed more than 24,000 life and non-life insurance customers across 23 countries about their buying practices,with over 1,000 consumers in India.
The survey has tried to uncover valuable insights into consumers’ perceptions and how expectations have changed over a period of time and as a result insurers in this market will need to think differently if they are to continue to be successful in attracting customers.
“Customer have become more demanding and require product and services to meet their evolving needs and expectations. Insurers need to focus on developing customised propositions,stronger direct relationships and increase transparency in their communication,” Ernst & Young,India Partner and Insurance leader Rohan Sachdev said.
The survey also reveals that customers view the insurance industry favourably and have been less affected by the financial crisis than banks in terms of undermining customer trust.
However,56 per cent of the respondents feel the industry is behind other sectors in terms of quality of service it delivers to its customers,it says.
There is a strong need for personal interaction when buying life or pension products,with 94 per cent respondents considering it an essential part of the buying process.
“The trend is slightly more marked here than in China,and is much stronger than in the UK and US,” it says.
It further says that customers have become accustomed to rewards for loyalty from other industries and increasingly expect the same from insurers. To increase their share of customers’ wallets,insurers must reward loyalty.
Persistency levels are lower in India compared to other countries,it said
About 17 per cent of Indian consumers say they have switched provider in the last five years’ considerably more than the global average from the survey of 10 per cent.
However,the survey provides evidence that if insurers can connect better with customers,and respond flexibly to their needs,they will be able to increase retention and maximise customer lifetime value,it adds.