Random Thought: Some More Watching (BRICS)0 August 3, 2015 at 6:36 am by Christian Bieck
Last week, I discussed some data details for the IBV customer retention study, “Capturing hearts, minds and market share“, looking at the countries with an English cultural background. To compare, today the same data for another group of countries with shared traits, type 2, i.e. high growth and low maturity, namely the BRICS countries. Unfortunately, I don’t have Russian data, so it’s just BICS – sorry about that.
Why do customer switch?
Changed needs that the old provider couldn’t meet are still the number one reason. In this chart, I added two columns, though, that were not very important in the U.K. et al: a switch because the agent or broker recommended it, or because the customer followed the agent in a switch. That’s consistent with observations n Winning Strategies: type 2 markets (need to) rely more strongly on the intermediary. If the relationship between intermediary and customer works (but not between agent and insurer), that can lead to some extra switching.
The chart for trust levels is fascinating:
There is an almost inverse relationship between industry trust levels and individual trust, which I can’t really explain. (I understand low industry and high individual trust, but not vice versa.) The only country in the group that had any significant YoY change in industry trust was South Africa, dropping from 45% in 2012 and 40% in 2013 to 21% in 2014 – any South African reader care to comment?
Last but not least, IoT:
This is the biggest difference to the “developed” countries – I am using the scare quotes because when we look at mobile and other connected use, these emerging markets are far ahead. Of course, this comes with a quite different attitude toward data sharing and privacy, but it is also a sign of greater empowerment. As usual, it is hard to separate the cultural from the market drivers.
 When we looked into market growth and maturity for the “Winning Strategies” study, we found that Russia and India were actually type 1 (low growth) – mainly because they had come through the financial crisis worse than the other three. According to the latest Sigma World Insurance Report, both have returned to growth, but not quite back to type 2 yet.
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