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Survey Reveals Growth Strategic Opportunity for Financial Institutions
STAMFORD, Conn., Sept. 27—Affinion Group, a global leader in business solutions that enhance and extend the relationship and loyalty of millions of consumers, today released the results of a study of consumers who had purchased insurance products through financial institutions (FIs) and associations. The study of 550 internet households in 2010 found that respondents who had purchased insurance products through financial institutions (FIs) and associations tended to be more loyal, and maintain longer and more positive relationships with those organizations. The study was conducted for Affinion by Synergistics Research Corporation.
“Consumers who have purchased insurance through their financial institution demonstrate a number of favorable characteristics. Young and affluent, they are attractive in terms of demographic profile. They demonstrate loyalty and relationship stickiness. Furthermore, they welcome cross-selling and believe it improves the relationship,” said William McCracken, CEO of Synergistics Research Corporation. “In fact, consumers who have purchased insurance as a result of a relationship with a bank, credit union or association may well be the envy of all types of financial services providers.”
Customers Who Purchased Insurance Were More Loyal
High loyalty was reported among those purchasing insurance through FIs and associations. Nine in ten (91 percent) of those purchasing insurance from an FI indicated that they were loyal to that institution, with four in ten reporting they were “very” loyal. Two-thirds of those purchasing insurance products through FIs reported they were more loyal to that institution than to others. Seven in ten of those purchasing via an association were more loyal to that organization than to other institutions.
“In this uncertain economy, many financial institutions are challenged with meeting new regulations and at the same time are trying to find ways to increase customer satisfaction, “said Wayne Conte, EVP of Affinion. “This study found that a possible strategic growth opportunity for financial institutions and other organizations is to broaden their offerings to include insurance, thereby strengthening their bond with customers who turn to them for this service.”
Insurance Product Sales Lead to Strong Customer Retention for FIs and Associations
Customer retention rates and “stickiness” were high among respondents that purchased insurance products through FIs or associations. Two-thirds of those that purchased insurance through an FI believed that the insurance relationship is a primary reason they will maintain the account relationship over the next year. Seven in ten of those purchasing insurance through an association believe that the insurance is the primary reason they will maintain the relationship over the next year.
Customers who purchased insurance through FIs and associations also tended to have longer relationships with those organizations. Those purchasing insurance through an FI had an account there for about 8.1 years.
Insurance Customers Tend to Be Young, Affluent
The survey found that younger consumers (aged 18 to 49) were more likely to have purchased insurance products through a bank or credit union than other age groups, and the likelihood of purchasing any type of insurance through these channels increased with household income. The study also found that the length of the customer relationship with the bank or credit union tended to increase with household income.
More Cross-selling Opportunities for Insurance Customers
The survey also found that consumers who have purchased insurance through FIs and associations expect to receive offers for additional products and services. In addition, consumers believe that the relationship has improved due to cross-selling initiatives.
Three-fourths of those purchasing through a financial institution and two-thirds of those purchasing through an association expect to receive offers for other types of services. About six in ten of those purchasing through a financial institution or association believe that the relationship is improved as a result of cross-selling offers. Previous research by Synergistics indicates that consumers are more likely to respond to cross-selling offers from providers with which they currently do business.
Demand Exists Among Non-purchasers for Obtaining Insurance through an FI or Association
In order to assess the opportunities to expand the market, non-purchasers were asked a series of questions about their reasons for not obtaining insurance through an FI or association and the likelihood of purchasing in the future. Among the non-purchasers, six in ten expressed some likelihood of obtaining insurance through an FI or an association. One-tenth reported that they would be “very likely.” There was no one single reason for not purchasing insurance through an FI or association. Four in ten felt that they did not have a need for insurance services. Three in ten reported that their insurance needs were being met elsewhere. Almost one-fifth felt that it may be too expensive and one-tenth report that they have never been offered insurance products and services.
To view a copy of the full study, please e-mail a request to email@example.com.
About Affinion Group
As a global leader with nearly 35 years of experience, Affinion Group (www.affinion.com) enhances the value of its partners’ customer relationships by developing and marketing valuable loyalty, membership, checking account, insurance and other compelling products and services. Leveraging its expertise in product development and targeted marketing, Affinion helps generate significant incremental revenue for more than 5,500 affinity partners worldwide, including many of the largest and most respected companies in financial services, retail, travel, and Internet commerce. Based in Stamford, Conn., the company has approximately 3,600 employees throughout the United States and in 12 countries across Europe, and markets in 15 countries globally. Affinion holds the prestigious ISO 27001 certification for the highest information security practices, is PCI compliant and Cybertrust certified. For more company and investor information visit www.affinion.com.
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