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Tech rivals to test insurer loyalty, study shows

Strong brand loyalty among insurance-buyers will not protect leading Australian and New Zealand insurers from high-profile rivals entering the industry, a study warns.

“The overwhelming support for major high-street and technology brands such as Apple, Amazon and Google threatens to rival the market position traditionally enjoyed by [the region’s] insurers,” Target Group’s Insurance Director Richard Holling says.

“Even though they are not closely associated with the insurance industry, their familiarity has laid the groundwork for a future foray into this field.”

Target Group, a software and business process outsourcing provider to global financial institutions, interviewed 500 consumers, focusing on the state of the region’s insurance industry and future expectations.

In Australia 56% of respondents aged 25-34 would be “likely” or “very likely” to consider buying insurance from a technology company such as Google, while 40% are willing to purchase cover through social media platforms such as Facebook.

In New Zealand 42% would buy from a tech company.

The study says insurers must embrace new technology platforms and offer customers the same reassurance and ease of use as their potential rivals.

“They need to be prepared to take the initiative and disrupt themselves, or new entrants will happily do it for them,” Mr Holling says.

About 53% of Australian respondents and 58% in New Zealand bought their most recent policy from a supplier they had used previously.

Some 76% of Australian respondents like and trust their current provider, while 86% would consider only 1-3 different insurers when choosing their next policy. In New Zealand these percentages were slightly higher.

“Our results confirm [Australian and New Zealand] consumers appear very happy with their insurers, and there is tangible evidence that they have strong brand loyalty,” the report says.

“The challenge will be to hold on to this business in the face of value-driven policies and more convenient competition, so the ‘big three’ can convince the next generation of insurance customers that they are best placed to meet their needs.”