Technology and the ways that insurers use it to communicate withtheir insureds is affecting how satisfied those customers are withtheir insurance companies.

|

A new study by Capgemini Financial Services finds a distinct drop incustomer satisfaction levels, especially with Generation Ypolicyholders, around the globe. Customer satisfaction rates inNorth America dropped 8.3%, the most significant point drop of themarkets studied. But even with the drop, it still maintains thehighest level of customer satisfaction at 39.7% compared to Europe,Latin America and other developed and developing countries.

|

The drop is largely attributed to a dissatisfaction with digitalchannels such as mobile applications and the use of social media.This is particularly important when it comes to Gen Ycustomers.

|

"Involvement of an agent is important," explains Keith Gage,vice president of insurance with Capgemini, "but it's important foragents to be using this newer technology to communicate withinsureds. Gen Y customers engage more frequently through electronicmedia, and while they value contact with an agent, they don't havethe patience for paper-based processing of claims."

|

In an era where technology makes communication almostinstantaneous, Gen Y customers have higher expectations andexpressed a greater degree of dissatisfaction with their customerexperience. They expect and want to interact more with insurersthrough digital channels like email, apps and social media ratherthan interacting on a personal level with claims adjusters andmanagers.

|

|

The most positive customer experience was in the agent channelfor customers of all ages and across all regions. In NorthAmerica, 50% of customers said they had a positive experience withtheir agents. And again, the use of or lack thereof when it came todigital channels had less than 30% of the customers saying they hada positive experience.

|

The challenge for insurers is to find a way to blend theintimacy and personal service that agents provide with thetechnology and access to social media that Millennials and Gen Ycustomers expect. They can use these channels to "touch" theirclients regularly in an effort to "wow" customers through theirpreferred methods of communication.

|

For clients who reported a property claim in North America, only24% said they had a positive experience compared to 47% ofcustomers who did not make a claim at all. According to the study,for customers accustomed to "conducting a wide range of personalactivity in streamlined, frictionless internet and mobiletransactions, the insurance claims process likely feelsinconvenient and cumbersome." This puts even more pressure oninsurers to process claims faster with the least amount ofinconvenience to the policyholder.

|

"The claims channel had the lowest positive experience," saidGage. "Insurers are taking steps to improve it, but they have aways to go. For customers, it is one of the most important momentsof truth." Part of this is probably due in part to customerexpectations "that have been set beyond most insurers'capabilities."

|

The study also identified a number of disruptors that willimpact insurers and the business of insurance in general.

|

Demographic changes will affect product pricing and underwritingas policyholders live longer and retire later. The number of teendrivers and single-parent families is also expected to increase.The longevity of an aging population and an increase in youngercustomers will provide opportunities for insurers to launch newproducts to serve a diverse range of clients.

|

tornado

|

The growing frequency of extreme weather events and the risingcosts associated with them will also require new insuranceproducts. Insurers will also require better modeling tools andanalytics to better manage these events, and there will be agreater dependence on social media to educate and alert customersbefore, during and after a catastrophe.

|

There will be new entrants into the insurance space like Googleand Amazon, who have little insurance-based experience but arebringing new processes and transparency, as well as increasedcompetition. Initiatives like Google Glass and Google's pursuit ofdriverless cars will have a major impact on the industry.

|

Increasing economic uncertainty globally will affect profitmargins as well as the products insurers offer.

|

According to the study, insurers "will feel greater pressure toincrease operational efficiencies and reduce the time to market fornew products." And as consumers develop new business models andproducts, insurers will need to be flexible in developing coverageto meet those needs.

|

Regulatory changes could become burdensome enough that insurersare forced to change existing products or stop offering themaltogether. It will be critical for insurers to understand howthese changes will affect their insureds in terms of productdevelopment and distribution, as well as any new risks theycreate.

|

|

The final disruptor involves technology and the Internet ofThings. As technology advances and the availability of informationbecomes all-encompassing, insurers will have access to data from awide variety of sources that can be collected and analyzed, givingthem a more accurate picture of an insured's risks and exposures.While access to this plethora of information will be invaluable, atthe same time it can be overwhelming as insurers seek to translateit into usable data. Privacy issues will also be a concern asevidenced by the series of recent and massive data breaches.

|

Technological advances have created an expectation of instantgratification where users can immediately access dozens of friendsvia social media, purchase items online at the click of a buttonand get information in seconds. These expectations carryover intohow insureds view the information and services they receive fromtheir insurers, requiring online or mobile payment options forpolicy renewals, faster claims processing through options likephoto and video uploads, and communication via social networkingand specialized apps.

|

Gage says that insurers will need to differentiate themselvesbased on an industrialized set of core systems.

|

"It's important for insurers to assess their ability todifferentiate themselves. Do they have the core systems that willallow them to market products that will differentiate them fromother companies?"  

|

In essence, insurers will need to completely revamp theirprocesses from the customer's perspective to meet these risingservice expectations. 

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.