As technology and connectivity continue to
transform the daily lives and shopping behaviors of consumers, we need to be
focused on what Farnaz Wallace, founder of the strategic consulting firm Farnaz
Global, calls the “New World Marketplace.” 1
As
Baby Boomers and Generation X age out, the millennials who grew up with mobile
technology are going to drive market behavior. While they are currently only 25
percent of the population, millennials are projected to make up 75 percent of
the population in 2025. For them, 24/7 service is the norm, online reviews
carry significant weight and interaction with brands on social media is an
everyday occurrence.
This
“New World Marketplace” has paved the way for a host of new trends that are
shaping the insurance industry—not only the products themselves, but the way
consumers shop for them. Here is a snapshot of three consumer trends impacting
the A&H industry in 2018:
1. Continued direct
channel growth.
While
direct channels have been steadily growing over a period of years, without a
doubt this continued trend demands our ongoing attention. The rapid and
continued rise of direct channels is being driven by consumers’ desires to
instantly fulfill their needs, mostly due to access to smartphones. Today, 77
percent of adults in the United States use a smartphone, a significant increase
from just 35 percent in 2011.2
2. The prevalence
of web and mobile as a research platform.
Seventy
four percent of insurance shoppers research online before they buy, but only 25
percent actually purchase online.3 This gap signifies an opportunity
for credit unions not just to close the deal but to improve the impression
shoppers are getting from their experience. Even when just checking prices,
consumers are absorbing an abundance of other information—everything from how
your navigation works to the availability of customer service and support—that
will eventually inform purchase decisions.
3. A continued
desire to shop around.
Statistics
show most consumers saw a cost increase of about 8 percent in 2017,4
and that price is the number one factor that drives people to research and shop insurance options. With additional cost increases projected for
2018, and the comparison shopping that will inevitably follow, how will you
package your products to be value-forward
When
it comes to insurance, the bigger question for credit unions is how
they will serve this New World Marketplace by transforming their offerings,
service and online experience to meet the consumer expectations and demands of
2018 and beyond.
1.
Andy
Serowitz, InsuranceThoughtLeadership.com, “Demographics and P&C Insurance”
February 15, 2016.
2.
Pew
Research Center, “Record shares of Americans now own smartphones, have home
broadband,” January 12, 2017.
3.
J.D.
Power, “2016 U.S. Insurance Shopping Study: Insurers Lean on Online Presence to
Grow Premiums,” May 1, 2016.
4.
ConsumerReports.com,
“Car Insurance Buying Guide: Finding the Policy That’s Best for You,” October
2017.
