Life Insurance Consumer Survey 2021

In Japan, point-based reward programs, in which consumers can accumulate points by shopping and by using specific products and services and then use those points to shop at participating vendors, have become a powerful marketing tool in recent years.  

In this survey, we observed differences in attitudes toward these point-based reward programs among the six customer segments. In particular, the responses of segment D, full-time dual income households, indicate that this segment has an overall favourable view of point-based reward programs and are more willing than other segments to provide their personal information in order to receive better service. It is therefore likely that offering these types of rewards could be an effective measure in terms of maintaining connections with this group of customers, and that insurance companies should consider building an ecosystem by collaborating with other businesses that offer products and services which consumers in this segment have a strong affinity for. These findings also indicate a potential for upselling by effectively utilising customers’ personal information in order to propose new services.

At the same time, somewhat paradoxically, we also observed cases where these socioeconomic orientations of respondents did not necessarily correlate with demographics such as age or income bracket. This suggests that it will be important for insurance providers to customise their services by collecting and aggregating personal information (including customer preferences).

For example, the responses of segment A, young single-person households, to questions regarding the use of personal information and level of interest in using new financial service providers showed a very interesting trend. Although this young demographic is not a current core customer segment for life insurance companies, they are clearly more open than other segments to service proposals that utilise their personal information and to using financial services provided by internet-based service providers. However, it seems likely that this preference correlates with their level of digital literacy or information literacy, rather than their age. Customer segments with a high degree of digital literacy are comparatively tolerant of companies using their personal information as long as they are able to control the information they provide. Therefore, adopting an individualised approach to this segment by utilising data in a way that can help improve the value of services provided to customers, rather than for aggressive sales pushes, could potentially lead to higher customer satisfaction and increased profits for insurance companies

The data revealed, somewhat surprisingly, that young single-person households preferred face-to-face communication more than the other segments. Although face-to-face sales approaches are typically costly, they can be an effective means of upselling to existing customers. In certain cases, it may also be worth considering online face-to-face sales or other methods that can be used to reduce costs while maintaining the advantages of physical face-to-face sales.

The responses also revealed the needs of younger generations, who often consider purchasing insurance coverage products when a major life event occurs, and who desire more detailed explanations when signing up for additional coverage products after initially purchasing core foothold products.

On the other hand, considering that this segment also wishes to complete procedures such as contract procedures on their mobile phones as well as to reduce contact risk due to the COVID-19 pandemic, insurance companies should explore possibilities such as limiting face-to-face meetings or adopting a hybrid format that combines online face-to-face meetings with mobile phone use.

When asked whether they know how to contact their insurance company in the event of an emergency, one in seven respondents overall answered that they might not be able to recall on the spur of the moment. Among respondents in their 20s, this ratio rose to one in four. In addition, one in four respondents overall responded that they would like to be able to contact their insurance company easily through a mobile app or similar means in the event of a disaster.

Therefore, we can see that using digital technology to build an ongoing customer connection is one way to meet the needs of these customers, and as we have already observed, it also increases the possibility of upselling, which can also be expected to increase the LTV (lifetime value; the overall monetary value of a long-term customer relationship) of these customers. Developing health-related apps to create an ongoing connection with customers is one strategy in line with this approach.

In addition, creating an easy way to communicate with customers may improve the accuracy of insurance claim recommendations when an emergency occurs, reducing the amount of effort required on the part of insurance companies.