T HE PREMISES OF COMMUNICATING WITH THE YOUNG CUSTOMERS

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6.7 The premises of communicating with the young

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6.7.1 Number of insurances

The young customers’ number of insurances divides customers according to how many and which types of insurances, they currently have at their insurance company, and at the same time indicates their involvement and breadth of insurances. A high number of insurances indicates that the customers are highly involved, and vice versa. In order to differentiate according to the customers’ number of insurances, the insurance companies must establish an overview of their customers in this age group of which insurances they hold. Which products and services they pay for should be easy for the insurance companies to gather, as this is essentially what makes them a customer. The numbers and types of insurances the customers have, helps to give an indication of the customers’ needs. It is difficult to know about all of their needs solely from which insurances they currently have. In order to fully determine whether the customers’ needs are covered, the insurance companies need to communicate with them to gain the desire

knowledge.

On the basis of our expert interviews and definition of insurances, it is argued that home insurances are an especially complex insurance, which requires understanding to a certain extent. As described by Ann Lehmann Erichsen and Anja Lintrup Sørensen (2019), home insurances is described as a “must-have”, as it covers four different insurances in one, including liability insurance, which is especially important, as there are eventualities in our life, which cannot be controlled. As the importance of home insurances is argued to be vital, it is argued that the young customers, which at least have home insurance displays a high involvement and correspondingly a lower involvement by not having home insurance. Number of insurances should not be seen as a way of expressing the young customers’ knowledge about their insurances neither about insurances in general. Instead it is a way of determining their

involvement in insurances and their current need of coverage. Hence, it gives an indication of their risk willingness as well according to how few or many insurances they have.

However, in order to not exclude young customers entirely as a mean of them having home insurance or not, the number of insurances for those customers without home insurance has been included as well. This inclusion has been made, as some customers have parts of what the home insurance offers, as it covers multiple insurances in one and hereby some customers are able to cover their needs by having liability insurance as a separate insurance, as an example.

Another reason behind this inclusion is because some customers might already be covered, as a part of, for an example, a roommate or partners home insurance. In such instance, it would not require for them to have home insurance. Hence, the inclusion of number insurances has been made, as customers are able to receive coverage without having home insurance but does not rely on the presence of home insurance solely, as defining for their involvement. On the basis of the survey questionnaire and the focus group interview, the average number of insurances

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held by the young customers is 2,66 (Appendix AD). Therefore, a low involvement is argued to be between 0 and 2 insurances, whereas a high involvement is argued to be when they have 3 or more insurances. The number of insurances provides the insurance companies with knowledge of the customers’ current insurance needs and their risk willingness. Hence, a combination of the number of insurances and whether or not they have home insurances indicates the young customers’ involvement.

The number of insurances and hereby the young customers degree of involvement, is considered as an indication of their current insurance needs. Some customers could be

categorized as having a lesser need than others, which also could be indicative of need for more insurances as an example. By categorizing customers by their number and types of insurances, it is further argued that it would also enable the insurance companies to give a presentation of which customers currently are more profitable than others, as more insurances would

presumably make them the more profitable ones. Thus, customers with three or more insurances and or home insurance at least, must be considered as more profitable for the insurance companies than those of a lower involvement. Hereby strategies can be formulated and concentrated on building trust with the more profitable customers.

6.7.2 Contact Frequency

The young customers’ contact frequency is used as the second variable in the segmentation process. Contact frequency is explained in this specific context to be how often the customers are in contact with the insurance company. The contact between customer and insurance company is usually initiated by the former, but contact frequency refers to contact which is established from both parties of the relationship, as contact can have been expressed by the customer to be needed. Furthermore, the contact frequency regards where an actual connection has been established through either telephone, mail, online and face-to-face, but do not count newsletters, updates to a policy in the electronic mailbox etc., where a connection between the customer and insurance company is presumably unapparent. Additionally, this measurement of contact frequency as a variable, excludes contact in connection with a claim handling. The exclusion of contact based on claim handling is made on the assessment that it could cause customers to be wrongly segmented, due to their contact frequency being higher than normal in regard to the claim handling, and hereby would give a wrong representation of their actual needs.

In order to differentiate the contact frequency levels of the customers, an overview should be created in order to segment the customers. Contact frequency is presumed to be information

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that the insurance companies possess, as part of their Customer Relationship Management (CRM) system, in order to log conversations and changes made to the insured insurances. On the basis for the survey questionnaire, it was apparent that customer who were more in contact with their insurance company displayed a significantly higher understanding of their insurances (Appendix Y). Furthermore, customers who claimed they know significantly less about

insurances (low degree and very low degree), are in contact on a yearly basis, or less, with their insurance company (Ibid.). Based on this observation, it is argued that customers, which are in contact with their insurance company more than once a year have a significant better

understanding of insurance and customers who are in contact with their insurance on a yearly basis and less have a significant worse understanding of insurances. Hence, a high contact frequency is defined by being in contact with the insurance company more than once a year and low contact frequency is defined as on a yearly basis or less. Moreover, the contact frequency between the customer and insurance company can also be argued to be a representation of their interest and willingness of wanting to learn more about insurances. Since contact is established between the customer and insurance company, with the exclusion of contact regarding claim handling, the contact must, to some degree, consist of information in the form of answers to questions presented by the customer or information presented by the insurance company. Thus, the additional information would improve the customers understanding ultimately, if the information is understandable to the customer. Hereby, a high contact frequency exhibits a higher interest of learning more about insurances and conversely with regards to low contact frequency. However, as the contact frequency can be argued to be an expression of the

customers interest and willingness to learn and understand insurances, it can also conversely be argued to be an indication being afraid of asking for more information. As one of the focus group participants Clara mentioned she felt like she was being judged by her insurance

company (C. Madsen, Focus group interview, April 16, 2019) and as Lone Eriksen (2019) also mentions that the young customers are afraid of being judged by their lack of knowledge or current financial situation in general. Thus, the contact frequency can also argue to be an expression of being afraid of asking for additional information. Hence, in order to fully

understand whether the customers low contact frequency is an expression of being afraid or an indication of not having the desired interest and willingness to want to learn more about insurance, further actions by the insurance company must be undertaken.

The contact frequency considers the young customers orientation towards insurance and how their willingness is perceived. By categorizing customers by their contact frequency, it is argued that it would enable the insurance companies to learn which customers are more in need of additional communication than others, based on their interest and willingness to obtain more information. In combination with the young customers’ number of insurances is it possible to

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segment the customers based on their needs, specifically their need regarding for communication.

As pictured above, the matrix is created with “Number of insurances” and “Contact frequency”

as the variables. The matrix consists of four different customer segments according to their involvement and contact frequency. In the following section, the premises of communication with each segment will be presented.