Untapped Potential of Cross-Selling Insurance

Simon-Kucher & Partners report explores the untapped potential of cross-selling insurance in the U.S.

New York, NY (July 24, 2019) – Simon-Kucher & Partners, a global strategy and marketing consulting firm, has released the results from a survey on “Customer Loyalty and Cross-Selling in the Insurance Industry.” The survey examines the insurance customer’s willingness-to-pay and appetite to hold multiple policies from a single insurer, and explores the potential to increase sales, profitability and retention from cross-selling insurance in the U.S.

“The U.S. insurance customer is willing to pay a premium for better service and convenience, sees value in having only one insurance provider versus multiple, and requires multiple insurance products,” said Wei Ke, Ph.D., managing partner at Simon-Kucher & Partners. “The preconditions for cross selling insurance are in place and there is clearly an opportunity here for insurers to be more proactive to invite their customers to consider a deeper relationship.”

However, while consumers have a strong desire for a one-stop-shopping experience with their insurers, the study found insurers are not actively capitalizing on opportunities to cross-sell and upsell to existing clients.

Some highlights of the survey:

Desire for One-Stop-Shopping Experience

  • While an overwhelming majority (93%) of respondents said they would like to purchase multiple insurance policies from one insurer, only 17% said they had a majority of their policies with one insurer
  • Most insurance companies do not offer a comprehensive portfolio of insurance policies in their offerings, and are not able to provide the U.S. consumer with a one-stop shopping experience
  • Customers said one insurance provider for all their insurance needs would make managing their policies easier and more convenient. They also said they would be willing to pay a slightly higher price for more convenience and better service

Willingness to Pay a Premium

  • Insurance customers are willing to pay a premium for value: a majority or 70% of customers said they are willing to pay more for better products, service and brand, a smoother experience and more convenience

Insurers Rarely Cross Sell

  • Insurers frequently contact their customers, though rarely for cross-selling: in the US only 4-9% of respondents said their insurer contacted them regarding additional coverage even though more than 84% of respondents said they have been in contact with their insurer within the last year

Correlation between Customer Satisfaction and Multiple Holdings

  • Customers who had a majority of their policies with one insurer were found to be more satisfied with their experience in terms of service, product specification, personal advisors, price and discounts, compared to customers who did not have a main insurance provider

Consumers overwhelmingly want an insurer able to meet all their insurance policy needs. However, few insurers are able to offer a one-stop shopping experience. The survey found that if insurers can address customers’ desires, they could charge for it. Insurers’ sales efforts are also coming up short, leading to missed-opportunities in terms of revenue growth and loyalty. The survey also found that customers using niche providers are less satisfied compared to those who have a main insurer.

About the Survey

The Simon-Kucher & Partners U.S. Customer Loyalty and Cross-Selling in the Insurance Industry survey was conducted in the Spring 2019 and included 702 participants who have at least one private insurance policy. Survey results are derived from a good distribution across the U.S. population with representation for significant variables including employment, age and marital status.

The full survey results are available on request.

About Simon-Kucher & Partners

Simon-Kucher & Partners is a global consulting firm with around 1,300 professionals in 38 offices worldwide focusing on TopLine Power®. Founded in 1985, the company has more than 30 years of experience providing strategy and marketing consulting and is regarded as the world’s leading pricing advisor. For more information, visit www.simon-kucher.com.

SOURCE: Simon-Kucher & Partners

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