When it comes to customer loyalty and cross-selling, German insurers are letting a lot of potential go to waste. This is the result of a recent survey by management consultants Simon-Kucher & Partners. Only 26 percent of all customers have their insurance policies bundled with one provider. Compared to the 2018 survey, the cross-selling rate remains at a low level – at that time 27 percent of all customers had a main insurer.
By the time you are 35, most insurance policies have been taken out
Currently, 90 percent of those surveyed can imagine taking out all insurance with one provider – as long as the offers meet their expectations. “Because it takes a lot more work for insurers to acquire new customers than to expand business with existing customers, insurers cannot afford to ignore the potential of cross-selling,” explains Frank Gehrig, Partner in Insurance Practice at Simon -cake. The study comes to the conclusion that in terms of cross-selling potential, the differences between people in different age groups are marginal. Young people are no less willing than older people to take out all insurance with one provider.
However, the survey also shows that by the age of 35, most customers have already taken out most of their insurance policies. “Customer loyalty should therefore begin with the first insurance contract,” recommends Carsten Mangels, Partner in Insurance Practice at Simon-Kucher. Because as the number of insurance policies increases, the probability increases that customers will take out additional insurance policies with an insurer with whom they have already established a business relationship. For 85 percent of customers who stated that they wanted to bundle all insurance policies with one provider, it was not the price, but simplicity and service that were the decisive criteria for choosing an insurer.
“If insurers really want to use their potential for customer loyalty and cross-selling, then they have to rethink advice,” adds Mangels. To do this, however, they would have to know the needs of their customers and address them in a targeted manner.
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