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Think like a retailer to take insurance to the next level

The new focus for insurers

The relationship between insurers and customers is changing. Today’s consumers have come to expect to get what they want, how and when they want it, and those expectations are spilling into other areas of their life. Savvy insurers have already begun “retailizing” their business, all the better to meet these rising consumer expectations and to get ahead of the competition.

Earlier this year, Deloitte surveyed more than 1,000 insurance customers across Canada to get a clearer picture of what such customers need, want, and expect as they move along the path to purchase and beyond.
Participants, however, identified one fundamental requirement of the relationship with their insurers above all others: trust. Consumers want to fully understand what they’re buying, know their insurer has their back if they make a claim, and don’t want their insurers to take advantage of the relationship, bombarding them with offers (but they would be open to relevant ones, if they can choose how often, how, and what kind of offers they receive).

Not all name brands are equal

Being a big insurer brand doesn’t necessarily mean consumers have a higher trust in the company or are more likely to buy from it. Indeed, 86 percent of the respondents in our survey said the lowest price is important to them, regardless of brand, and only 32 percent specifically take insurance brand into account when they’re getting a “good deal”. Given this insight, insurers should think of brand as a checkbox, or precondition, for trust, as opposed to the sole factor driving a purchase decision.

Being a big brand that already enjoys a high level of consumer trust, on the other hand, is appealing. We asked our survey participants if they’d be interested in buying insurance from various large retailers, including Apple, Tesla, Amazon, and Costco. We found they were. Costco was of particular interest, with one in three respondents saying they’d be interested in buying insurance from the retailer.

Buying coverage on the go

Some traditional insurance companies might be surprised to learn that almost a third (32 percent) of respondents noted their interest in purchasing directly from an insurer’s website, circumventing the need for making the transaction with an agent. And that’s not just millennials: nearly as many consumers aged 35-54 as those aged 18-34 reported a willingness to go online to purchase insurance.

This means the overall demographic opportunity for digital tools is much larger than some (or many) might have initially been imagined. Examples of new digital platform-only companies include Sonnet in Canada and New York-based Lemonade, which are breaking ground–and traditional rules–in reimagining the digital insurance business model.

Want good engagement? Give customers some control

Extending a little courtesy about contact boundaries goes a long way. When given control over the content and frequency of communications the insurer sends, 61 percent of our respondents said they’d be open to learning about new product offers or relevant coverage options. Compare that to the 52 percent who considered as spam any communication from the insurer that wasn’t about their policy if the customer didn’t have any control over interactions.

Customers were also quite willing to share personal information in exchange for something of value to them: 43 percent of the survey respondents said they’d share information for a more personalized experience, with 62% saying a discount on annual insurance premium would persuade them to divulge more about themselves.

Designing for trust

Finally, insurers need to embed trust into every interaction with an existing or potential client. We believe there are five guiding principles to keep in mind:

  1. Predictability – Help customers understand clearly what they’re buying, why it matters, and how to respond to a claim. 
  2. Consistency – Do what you say you will do and deliver on promises without hesitation, which is the foundation of trust. Don’t consider doing any more until that base is solid. 
  3. Advice – Customers will seek information from a variety of sources, but ultimately place value in a ‘trusted opinion’—make sure it’s you. 
  4. Options – Giving customers the option to make choices establishes a sense of intimacy and partnership in decision-making. Ensure customers have relevant options and make them readily available through your own channels so customers don’t have to turn to other sources. 
  5. Value-add –Learn more about each customer to understand what kind of adjacent services or products they may want, when they may want it, and how they want to receive it.

The “retailization” of insurance is not only inevitable, it’s well underway—any insurer that thinks otherwise will find itself at the back of an expanding playing field.


Read our full report on the retailization of insurance (coming soon) or its precursor, Insurance Re-imagined 2025.

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