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Why business as usual is not an option
The UK motor insurance market is at a critical juncture, with insurers navigating extremely challenging profitability, intense regulatory and governmental scrutiny and rapidly changing distribution channels, technology and consumer behaviour. Current market conditions mean that insurance companies cannot afford to maintain business as usual operations. They need to rapidly adapt and change their mindset in terms of the way in which they operate and compete in this sector.
Accenture conducted online interviews with 2,751 motor insurance customers in the UK in October 2011, probing the perceptions and behaviours governing their motor insurance relationships, switching activity, levels of satisfaction with service experiences, and the factors that influence provider selection.
The motor insurance market is at a critical juncture and insurers are facing challenges on all fronts. A dire few years in terms of profitability, a drying up of reserve releases, and a long period of unprecedented low interest rates, all mean that premium rate rises are attracting attention and criticism, but not yet making a really significant impact on the bottom line. The market is also under intense scrutiny from the OFT, Ministry of Justice and the Transport Select Committee, and is facing an uncertain future as a result of the potential outcomes of these investigations, along with the impact of the European Court of Justice gender ruling.
At the same time the market is navigating the challenges brought on by changing distribution channels, new technology and shifting consumer behaviour and attitudes. To top it all off, the fiercely competitive nature of the market shows no sign of dying down. These challenging and constantly changing market conditions mean that insurance companies cannot afford to maintain business as usual operations. They need to rapidly adapt and change their mindset in terms of the way in which they operate and compete in this sector.
Accenture’s 2011 survey of motor insurance customers in the UK puts the spotlight on some of the major issues facing the industry.
Highlights from Accenture’s 2011 survey of UK motor insurance customers include:
To be successful in current market conditions insurance companies must adapt to the waves of change facing their industry and the way in which they do business. Insurance companies need:
Insurance companies need:
For more details on the actions that insurers should be taking and the implications of the digital world for the insurance industry, please see Accenture’s Point of View: The Digital Insurer.
June 26, 2012
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