With the presumption of change as an inevitable phenomenon, the aim of this study is to explore ways in which insurance companies can enhance their ability of meeting the constant changes in customers’ preferences in an increasingly competitive environment.
In order to conduct this study, we have used a qualitative research strategy to gain a better understanding of young customers’ preferences about the services provided by insurance companies. Based on these preferences we provide useful suggestions for insurance companies.
Existing theory suggests that customers change their preferences according to their life circumstances and while certain preferences are well-defined others can be inconsistent. In an increasingly competitive environment, where insurance companies fight for the same customers, having a customer-oriented culture is extremely important not only to retain customers, but also to acquire new ones.
This study presents various theories on the changes in customers’ preferences as well as theories regarding organizational strategy and change. The empirical data has been collected through two focused group interviews with students under 28, in Västerbotten, Sweden and through a group interview with leading representatives of a dominant insurance company in the county.
The findings suggest that young consumers’ preferences regarding insurance services are based on their life situation. Price is a decisive factor in the choice of insurance company and their services. The results also showed that many of the respondents are skeptical towards the intentions of and services provided by insurance companies. The complex nature of insurances and the intangibility of services in general, can be possible explanations.
Strengthening the evidence in existing studies, we also conclude that there is a vast amount of information insurance-takers would like to have access to before, during, and after purchasing insurance. Additionally, customers would like flexible insurance bundles with the possibility to add and subtract components as life situations change.
Finally, based on these results, we suggest how insurance companies could turn these findings into opportunities. We suggest how and when to meet the customers, and how to build long lasting, trust-based relationships which could lead to increased customer loyalty over time.
Source: Umeå University
Author: Alinvi, Fatima | Babri, Maira