Insurance Cos Yet To Reap Digital Benefit
Only 32% of insurance customers globally are having positive customer experiences with their insurers, according to a Capgemini and Efma report, which in turn highlights the need for insurers to focus on digital technologies to improve customer experiences, to minimize customer defections and secure profits.
“Insurers’ profits can be driven by improving positive customer experience and responding to customers’ increasing preference for both internet and mobile digital channels,” said Jean Lassignardie, Chief Sales and Marketing Officer, Capgemini Global Financial Services.
According to Lassignardie, insurers who master both digital delivery capabilities and online services across different stages of insurance life-cycle, especially claims payouts or policy acquisition where customers expressed needs for improvement, will gain the greatest competitive advantages.
The report finds that digital channels, especially mobile, are the most likely to drive profitable customer behaviors such as referrals or purchasing additional products. Digital improvements were also needed in the areas of claims payouts and policy acquisition.
The report finds that agents remain the dominant channel for driving positive customer experience, followed by internet and mobile. Likewise, the demand for digital channels has grown from the past, as the WIR report shows that with insurers reporting that within five years they expect nearly one-third of their business to occur over digital channels – projecting approximately 20% to come from online channels and nearly 11% to come from mobile channels, which is a positive indication.
Regionwise, the report finds the Netherlands having the largest increase in positive customer experience at 18.2% primarily due to digital and broker channels. Younger customers across the world are showing preferences for digital channels over traditional. In the emerging markets of Developing Asia-Pacific and Latin America, the importance of digital channels is also very high among younger customers.
Firms with a strong digital presence and a customer focus are, on average, are 26% more profitable than others. To meet customer demand for digital and improved customer experience, insurers need to fully embrace a top-to-bottom approach to digital transformation, while also driving operational excellence at the back-end to ensure profitability, says the study.
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