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PEOPLE WATCH

AUGUST 2018

GOT IT COVERED

PEOPLE WATCH

PEOPLE WATCHPEOPLE WATCH

Across 2017, more than one in five (2.54 million) holders of comprehensive car insurance policies

either changed companies or renewed with the same company. This represents an increase of nearly

400,000 over the last four years and presents a major marketing opportunity to focus on policy

holders who are for an alternative company.

The Australian insurance industry is a mature, full service industry providing valuable protection for

Australian lives, assets & health. It is also facing unprecedented levels of disruption largely driven by:

the evolving ways in which customers seek, acquire and use financial services;

the exponential rise in the technology-enabled innovation along the insurance value chain; and

heightened public and regulatory scrutiny of financial services.

Understanding consumers is more critical than ever in order to capture those looking for change and

looking for more value in order to stay with their provider each year.

SOURCE: 2.5 MILLION CAR INSURANCE POLICIES AT RISK OF SWITCHING, ROY MORGAN RESEARCH, FEB18; INSURANCE FACTS AND FIGURES, PWC AUSTRALIA, 2017


FIVE TRENDS TO WATCHINSURANCE


59% of insurance customers say they are not very brand loyal.

- Adshel Path to Purchase Study, 2018


1. CUSTOMER FOCUS

87% of Australians think their current private health

policy is expensive with five million reviewing their

policy in the last year.

With consumers price-conscious and open to changing

providers, insurers focus on becoming more customer-

centric as a way to drive growth and increase value.

Customer experience (CX) is still the main focus for

Australian insurers with global peers using CX to

develop their insurance products more effectively.

Global health insurers are providing an integrated offer

to customers, including value-added services such as

property management and health. This allows insurers

to build their relationship with the customer outside of

the traditional model.

SOURCE: MOST AUSTRALIANS DON'T THINK PRIVATE HEALTH INSURANCE IS VALUE FOR MONEY, THE GUARDIAN, NOV 16


as insurance, banking and healthcare reported their companies have experienced

cyber-

- ASX 100 Cyber Security Health Check Report


2. CYBER INSURANCE

SOURCE: KPMG GENERAL INSURANCE INDUSTRY REVIEW 2017 + INSURANCE JOURNAL 2018 TRENDS

Cyber Insurance is a growing business.

Cyber-attacks continue to affect governments, private firms and consumers at an annual cost of $400 billion. Global investment in Cyber Security was approximately $75 billion in 2015 and is forecast to be $170 billion by 2020.

The market for cyber insurance continues to increase as businesses and individuals seek to protect themselves from risk including fraud, cyber attacks and identity theft.

Small businesses are not immune from cyber attacks with half experiencing data breaches putting customers and employees personal data at risk.


insurtech, Australia is increasingly seen as

an attractive place to test customer

- KPMG General Insurance Industry Review 2017


3. INSURTECH

SOURCE: INVESTOPEDIA.COM.AU/INSURTECH

Insurance is not immune to the impact of technological advancements. Millions are invested each year in the development of new tech (insurtech) to tackle how policies are assigned, ensure products are priced competitively and reduce risk for the insurer.

Insurtech has been critical in product

example, Uber requires insurance coverage for drivers and passengers at every stage of the trip. Uber drivers use flexible policies and pay per mile through apps developed to calculate variables.

This app technology allows customers, in particular millennials, access to insurance for single valuables such as cameras and computers purchased in minutes on their mobile.


25% of ianswer to managing their current skills gap.

- KPMG General Insurance Industry Review 2017


4. AUTOMATION

SOURCE: CAPGEMINI TOP 10 TRENDS IN INSURANCE IN 2017

For many years the insurance industry has been automating business procedures through artificial intelligence and new tech, reducing the cost of operations and process time.

Chatbots are leading the way in automated personalised customer interactions to quickly resolve customer queries and pay claims within hours with minimal human intervention.

Drone technology is also being used for property damage assessment and claims estimation during a natural disaster initiating claims quicker.


Between now and will account for 54% of the population.

- Macquarie Group Research, 2017


5. NEXT GENERATION

Australian Millennials will earn two of every three dollars of income by 2030 and their spending power will rise to $853 billion, according to recent Macquarie Research.

This huge consumer group is comfortable with the share economy and digital tech, has later in life marriages and home ownership which disrupts the impact of traditional insurance advertising.

Emotional triggers that once formed the basis for impactful advertising (hello picture perfect house, two kids and partner) will not cut through with this generation. Marketers need to personaliseand customise communication, talk to individual needs, then use smart tech to automate, speed up and create ease of engagement to capture this consumer.

SOURCE INSURANCE COMPANIES NEED TO ADJUST PRODUCT AND APPROACH TO ADDRESS


WHERE TO NEXT?


REACHING THE INSURANCE AUDIENCE

Technology is expected to develop within the insurance industry; enhancing the customer experience

through efficient automated processes. Apps continue to evolve with the capability to calculate

competitive pricing or offer platforms for on-demand insurance such as borrowing a friends car that

can be easily purchased via a mobile phone.

Over 65% of insurance searches on Google relate to general insurance products. Customers are

becoming more comfortable researching and then purchasing general insurance products on their

mobile phones, while on the train or bus going to work or even while they are waiting for their daily

coffee.

We know from the Commuter Study 43% of people use their daily commute to do . Out-

of-home drives commuters online accounting for 26% of search activations prompting commuters to

research the Insurance category.

oOh! can drive commuters online while on their journeys to consider and research insurance products.

SOURCE: INVESTOPEDIA.COM.AU/INSURTECH + KMPG GENERAL INSURANCE INDUSTRY REVIEW 2017 + ADSHEL PATH TO PURCHASE STUDY, POLLINATE 2018

PEOPLE WATCH

For more information on connecting with consumers contact us today.

THANK YOU

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