The 2017 World Insurance Report draws upon Capgemini’s Voice of the Customer survey to track changing consumer preferences when it comes to their insurance transactions. The report was again produced by fellow Capgemini Financial Services and Consulting colleagues, subject matters in Insurance, and Efma. Life changing moments e.g. moving, marriage, a birth of a child, divorce, and claim give the insurers the almost unique opportunity of presenting themselves to consumers. Trust is built or broken, ease of access tested, and tone of voice experienced.
In order to speed up traditional insurers understand that the adagio “if you can’t beat them, join them” still holds true when it comes to InsurTech. Tech-driven developments like Artificial Intelligence (AI), connected devices such as wearables, cars, and medical appliances, data and analytics, as well as insurance-as-a-utility can better be embraced and aligned with an investment portfolio each insurer is composing.
Key Findings on digitalization and trust
The World Insurance Report lists digital technology (sometimes called digitalization) as core to insurers’ strategies. The momentum is here.
- Emerging digital technologies, such as sensor-based wearables and the Internet of Things (IoT), are altering consumer behavior, driving a need to reinvent insurance offerings.
- Digital interactions are highly valued by customers, especially GenY and the tech-savvy, who ranked the computer as the most important touchpoint for their insurance transactions.
- Young and tech-savvy customers represent important segments in terms of incremental revenue potential, with 32.6^of GenY customers and 42.1% of tech-savvy customers saying they are likely to buy another product (compared to 29.1% of non-GenY customers and 19.7% of the non-tech-savvy).
- However, these segments are also more vulnerable to attrition, with only 48.6% of GenY customers (compared to 55.0% of older customers) saying they are likely to stay with their existing firms, and 51.3% of the tech-savvy saying so (compared to 54.7% of the non-tech-savvy).
- Building and maintaining relationships with young and tech-savvy customers will require insurers to cater to their clear preference for digital touchpoints.
- InsurTechs are now integral to the insurance experience, with nearly one-third of customers globally (31.4%) saying they use them exclusively or in combination with incumbent firms to fulfill their insurances needs.
- 39.8% of customers say they trust their insurers, compared to only 26.3% for InsurTechs.
Strengths of insurance and InsurTech firms
Significant strengths of insurance firms are security and fraud protection, brand, access to products and services, and personal interaction. InsurTech firms offer significantly better value for money, ability to integrate social with financial world, and a timely and efficient service.
Collaboration is an effective way forward
By combining their strengths, insurance firms and InsurTechs will be positioned to create personalized and compelling customer offerings. Collaboration also allows each to address specific internal and external challenges. Most insurers favor partnering with InsurTech firms over acquisition or in-house development.
Download your own copy of the full World Insurance Report at www.worldinsurancereport.com.