UK-based insurer Saga ─ which offers a suite of insurance products, including travel insurance, that largely focus on those aged over 50 ─ has reported lower profits, and shares in the company have hit a record low.
Saga’s Chief Executive, Lance Batchelor, told the BBC that the company’s insurance business has been in decline over the past decade, while its cruise side has been flourishing. He said that travel bookings to Europe this year were down by eight per cent, compared with the year previous and blames this on Brexit: “Brexit is putting a clear dampener on customers’ willingness to commit to holidays in 2019,” he said.
The company said that it will change its approach to selling insurance; focusing on selling insurance directly to customers rather than through price comparison websites and also offering services that consumers can’t find elsewhere.
Nicholas Hyett, an equity analyst at Hargreaves Lansdown, commented on the news: “While the speed of deterioration has taken the market, and us, by surprise, there have been worries for some time that the Saga brand was losing its appeal at the lower end of its ‘over 50s’ customer base. Without brand loyalty, Saga is just another insurer.”
This highlights the importance of brand loyalty and engaging the consumer. Richard Coleman, European Director at Collinson, spoke about this in a recent ITIJ feature. “It’s no longer enough to just improve your products and services; today you are competing with the best experience a customer has ever had, regardless of the brand or sector they have had it with. Therefore, customer expectations are incredibly high,” he said.
Despite the challenging environment presented by Brexit, it seems that, now more than ever before, insurers need to work on establishing and retaining a loyal customer base by providing a unique and personalised experience.