Main findings from the World Insurance Report 2015 with spotlight on The Netherlands

The World Insurance Report 2015 was launched on 26 February 2015. Capgemini and the European Financial Marketing Association (EFMA) conducted over 15,500 global customer surveys, across 30 insurance markets, and interviewed more than 150 insurance executives for the 8th edition of the report. Multi-year reflections are given on the insurers’ efficiency model and customer experience index. Special spotlight section this year is the insurer of the future.

Three main findings are:

• The alarming drops in positive customer experience, indicating towards rising customer expectations.
• The three biggest disruptive forces facing insurers today—and how they will tackle them.
• Why Generation Y’s expectations from their insurer are not being met—and what it will take to win their loyalty.

Findings for The Netherlands

Close to home are The Netherlands. Despite high claims expenses due some severe storms and fires in 2013 Dutch non-life insurers were able to increase their profitability again, for the first time in recent history. Due to tough competition lowering premiums, the claims ratio stays high. Operational ratio is one of the lowest in the world currently at 8,6%, but roughly unchanged in the past couple of years. You may conclude that all restructuring efforts and cost cutting operations aren’t reflected yet in a significant lower operational ratio. In a highly saturated market non-life insurers will however continue lowering operational costs. Acquisition costs are low (13,9%), one of the world’s lowest. Tech-savy customers preferring buying insurance policies online are helpful here.

On a scale of 100 the customer experience index in the Netherlands dropped with 7,3%. And with only 32% of the interactions perceived as positive, 58% neutral and 10% negative, positive experiences dropped with 12,5% compared to 2013. For this the Net Promotor Score is renamed Customer Advocacy Score, because the original NPS was sliced for customers with a very positive experience, neutral or negative experience. The drop in positive experience level of Generation Y (age under 35) is much larger then older generations. Gen Y customers place much higher importance on mobile, social media channels. Each interaction with insurer really counts.

In a follow-up post I’ll highlight disruptors for current insurers and the shapes of the insurer of the future.