Canadian insurers missing opportunities for cross-selling
A recent study from strategy and marketing consultancy Simon-Kucher & Partners found that insurance consumers in Canada would prefer to have most of their insurance policies from one provider.
The study, conducted in spring 2019, surveyed 702 Canadians with at least one private insurance policy.
An overwhelming majority of 93% of respondents said they would like to purchase multiple insurance policies from one insurer. However only 29% said a majority of their policies were with one provider. According to Simon-Kucher, the gap denotes a missed opportunity for insurance providers to cross-sell and upsell a wider range of insurance products.
Most insurance companies don’t offer a comprehensive portfolio of policies to serve as a one-stop, Walmart-style offering of the insurance world. Respondents said having a single provider would make managing their policies easier and more convenient, and they would be willing to pay a slightly higher price for more convenience and better service.
Seventy percent of Canadians were willing to pay a premium for value, including better products, services and brand, a smoother experience, and more convenience.
“The Canadian insurance customer is willing to pay a premium for better service and convenience,” Wei Ke, managing partner at Simon-Kucher & Partners, commented. “They also see value in having only one insurance provider versus multiple, and requires multiple insurance products, suggesting that there is an opportunity for insurers to deepen the relationship.”
Despite frequently contacting their customers, insurers rarely do so to cross-sell. Only 4%-5% of respondents said they were contacted for additional coverage, even though nearly 90% said they had been in contact with their insurer in the last year.
Canadians who did have a majority of their policies at a single provider reported greater satisfaction with service, product specifications, personal advisors, price, and discounts versus those without a main provider.
So there you have it. If somebody can provide pet insurance, boat insurance, renter’s insurance, and life insurance all in one spot, the customers will come, and they’ll pay slightly more for it.
Related: Simon-Kucher founder Hermann Simon releases book on price management
