Having recently looked around for insurance as a consumer and been close to the subject as a researcher, it is clear that insurers still almost exclusively appeal to consumers with introductory offers which fall away after month 12 of a policy.
This type of offer may satisfy the insurer’s acquisition objectives, but potentially it encourages consumers to view the policy more as an easily transferable commodity rather than developing a relationship with the company.
Whilst encouraging consumers to think about a relationship which lasts more than one year carries some logic to the insurer, ‘loyalty’ (the buzz-word for companies not so long ago) amongst consumers has moved to the back seat within motor insurance and been stored in the loft in home insurance!
In the current economic climate, perhaps keeping the focus on acquisition and ensuring you are acquiring more than you lose is an understandable strategy, rather than changing tack and perhaps a more risky strategy focusing on retention based offers.
Posted 29 June 2011 by Mark Foran, Senior Research Manager