Insurers Struggle to Keep Up With Digital Demands
From Generation Y1
Positive customer experience2 ratings worldwide declined at
an alarming rate, reveals the eighth-annual World Insurance Report
(WIR) released today by
Capgemini, one of the world's foremost
providers of consulting, technology, and outsourcing services,
and Efma. Despite efforts by
insurers to meet the increasing demands of their customers,
positive customer experience ratings globally dropped 3.7
percentage points from an already low 32.6 percent in 2013 to 28.9
percent in 2014. North America saw the largest decline (8.3
percentage points), followed by Latin America (5.3 percentage
points) and Europe (3.4 percentage points).
A graphic accompanying this release is available at
http://media.globenewswire.com/cache/29447/file/32155.pdf
"Falling positive customer experience ratings coupled with a
growing number of market disruptors– such as Big Data analytics,
regulatory change and economic uncertainty – threaten to shake the
stability of the industry and require insurers to become fully
customer centric or risk losing their customer base to competitors
and new entrants," said Jean Lassignardie, Chief Sales and
Marketing Officer, Capgemini Global Financial Services.
Generation Y is raising demands and lowering customer
experience ratings for insurers
With Generation Y, the customer segment between 18 and 34 years
old, comprising one-quarter to one-third of the population in many
markets, this segment is of high importance to insurance firms. Yet
this tech-savvy generation presents a huge challenge for insurers,
often demanding a high level of service across digital channels.
The WIR's Voice of the Customer survey3 revealed a particularly
sharp drop in positive customer experience levels among Generation
Y insurance customers in 2014, which helped bring down overall
customer experience ratings around the globe. This decline was most
pronounced in developed countries where, for example, in North
America positive customer experience ratings for Generation Y
declined by 10.9 percent and by 5.4 percent in developed
Asia-Pacific.
As a result, insurers are in danger of losing this important
customer segment to more agile competitors unless they can improve
their digital services and provide more personalized and fully
integrated customer experiences regardless of preferred channels.
Insurers will need to focus on social media, online, and mobile
channels to engage with their customers as the WIR found that more
than 50 percent of Generation Y customers rated these channels as
important in most regions.
Insurers fell short on core capabilities that can
improve customer experience
The WIR found that insurers' maturity levels are lagging in
seven core capabilities that can help improve customer experiences
and capitalize on opportunities presented by market disruptors.
Insurers scored lowest in connecting and engaging regularly with
customers as well as having a complete view of customer data and
relationships.
The report found that most insurers are connecting with
customers at only a very basic level. While insurers offer services
across a full range of channels, the customer experience across
these channels is often disjointed. Similarly, most insurers aren't
engaging with their customers regularly enough or personalizing
content for different customer segments. Insurers are also
struggling to gain a complete view of their customer relationships.
While most insurers are capturing and storing customer data, many
are failing to capitalize on analytics to identify varying
behaviors, preferences or a comprehensive and real-time view of
their customers.
A customer-centric approach is the key to a successful
future
Reversing declining customer experiences means insurers must go
beyond initial attempts to create a customer centric approach and
migrate towards more effective engagement that combines channel
experiences – both traditional and digital. While insurers need to
develop and improve digital channels to keep pace with the growing
demands of their customers, it should not be at the expense of the
agent relationship - as the WIR found that the agent channel is
providing the highest levels of positive customer experiences. In
fact, positive experience levels on when using insurance agents
were almost 10 percentage points higher than those of digital
channels. This disconnect suggests that the current services
provided on digital channels by insurers are dragging down global
customer experience levels. Insurers must not only improve their
channels to better serve customer needs, but they must also make
sure that the channels work in harmony at any needed touchpoint
along the customer journey.
"Ongoing investments need to support all types of channels, at
least for the foreseeable future," said Jean Lassignardie, Chief
Sales and Marketing Officer, Capgemini Global Financial Services.
"Insurers must strive to bring some of the qualities that define
traditional channels to the newer channels and vice versa. Insurers
that are able to blend traditional and digital channels in a
seamless way will be the leading edge providers of the future."
Improving customer experience is imperative as insurance
industry disruptors take hold
It's important that insurers take action now to improve customer
experiences as the industry faces a flood of market disruptors that
have the potential to challenge and undermine businesses unless
they are prepared for them. Big Data Analytics is expected to have
the biggest impact on the insurance industry with 78 percent of
executives4 citing it as the key disruptive force, followed by
regulatory change (46 percent) and economic uncertainty (42
percent). Other market disruptors include shifting demographics (35
percent), extreme environmental conditions (15 percent), new
competition from non-insurers like Google and Amazon (22 percent),
and advanced technologies such as the Internet of Things and
telematics5 (21 percent).
"If you simply look at profit margins, you will think everything
is positive for insurers," said Patrick Desmarès, Secretary General
of Efma. "But it's clear from the lower positive customer
experience ratings that insurers are failing to meet the needs of
customers. This is especially concerning given the strong link
between positive customer experience and customer loyalty and
profitability and the game-changing impacts posed by marketplace
disruptors."
For more information visit www.worldinsurancereport.com
About the World Insurance Report
The World Insurance Report 2015 draws on research insights from
30 markets. Capgemini estimates that these countries account for
approximately 94 percent of the global insurance market.
The WIR is based on comprehensive research from the Voice of the
Customer survey with responses from 15,500 customers across 30
countries and five regions, about their general satisfaction with
their insurer. In addition 165 interviews with senior insurance
executives from more than 100 leading insurance firms form the
basis for the research. The responses from the global Voice of the
Customer Survey analyze customer experiences across 112 data
points, providing the underlying input for Capgemini's Customer
Experience Index (CEI). The CEI calculates a customer
experience score that can be analyzed across a number of variables.
The score then provides insight on how customers perceive the
quality of their insurance interactions.
About Capgemini
With almost 145,000 people in over 40 countries, Capgemini is
one of the world's foremost providers of consulting, technology and
outsourcing services. The Group reported 2014 global revenues
of EUR 10.573 billion. Together with its clients, Capgemini creates
and delivers business and technology solutions that fit their needs
and drive the results they want. A deeply multicultural
organization, Capgemini has developed its own way of working, the
Collaborative Business ExperienceTM, and draws on
Rightshore®, its worldwide delivery model.
Learn more about us at www.capgemini.com.
Rightshore® is a trademark belonging to Capgemini
About Capgemini's Financial Services Global Business
Unit
Capgemini's Global Financial Services Business Unit brings deep
industry experience, innovative service offerings and next
generation global delivery to serve the financial services
industry. With a network of 24,000 professionals serving over 900
clients worldwide Capgemini collaborates with leading banks,
insurers and capital market companies to deliver business and IT
solutions and thought leadership which create tangible value.
More information is available at:
www.capgemini.com/financialservices.
About Efma As a global not-for-profit
organization, Efma brings together more than 3300 retail financial
services companies from over 130 countries. With membership from
almost a third of all large retail banks worldwide, Efma has proven
to be a valuable resource for the global industry, offering members
exclusive access to a multitude of resources, databases, studies,
articles, news feeds and publications. Efma also provides
numerous networking opportunities through work groups, online
communities and international meetings.
Visit: www.efma.com
1 Generation Y is the customer segment aged between 18 and 34
who have always had technology such as the internet and smart
devices in their adult lives.
2 Customer experience requires a deep understanding of customers
over the full life-cycle of their interactions with their insurer
differing from one-time customer satisfaction
surveys. Customer experience measures how customers
perceive the quality of their interactions with a company and takes
personal values and standards into account.
3 The Voice of the Customer survey asked more than 15,500
customers in 30 countries across five geographic regions about
their general satisfaction with their insurer.
4 The WIR 2015 is based on a comprehensive body of research that
includes 165 interviews with senior insurance executives of 100+
leading insurance firms. Of the total firms interviewed, 48 percent
sell both life and non-life insurance, 20 percent focus solely on
life, and 32 percent are dedicated to non-life.
5 Telematics refers to any device which merges
wireless telecommunications and infomatics (data.) Insurers
use telematic devices in cars to analyze driving patterns for
offering safe driver discounts.
CONTACT: Capgemini Contacts:
Courtney Finn
Weber Shandwick for Capgemini
cfinn@webershandwick.com
+1 952 346 6206
Cortney Lusignan (EMEA)
Weber Shandwick for Capgemini
clusignan@webershandwick.com
+44 (0) 20 7067 0764
Efma Contact:
Karine Coutinho
Efma
karine@efma.com
+33 1 47 42 69 82
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