[May 22, 2018] |
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World Insurance Report 2018: Digital agility is key for insurers as BigTechs ponder entering the market
While insurance companies struggle to deliver a superior customer
experience, BigTech1 firms are poised to enter
the insurance industry. By enhancing their digital agility and
developing future-ready operating models, insurers have an opportunity
to attract and retain customers to compete with this disruption, finds
the World Insurance Report (WIR) 2018 from Capgemini
in collaboration with Efma.
The report also examines how traditional incumbent insurers have fallen
behind their banking peers in meeting customer demands, making them
vulnerable to such non-traditional entrants.
This press release features multimedia. View the full release here:
https://www.businesswire.com/news/home/20180521006130/en/
"The use of data and being able to offer a truly digital customer
experience are both critical for the insurer of the future, something
Big Tech firms like Amazon and Google (News - Alert) excel at. The threat from such
entrants is more real than the insurance industry might want to admit,"
said Anirban Bose, Global Head of Financial Services and Member of the
Group Executive Board at Capgemini (News - Alert). "Insurers, risk assessors by
nature, must urgently turn their gaze inwards and consider the
competitive risks within their own industry in order to evolve and
survive."
Insurance is playing catch-up in delivering technology-enhanced
customer experiences
Insurance firms ranked third after retail and banking on cross-industry
customer experience scores, with the greatest difference among Gen Y2
customers aged 18 to 34. While more than 32 percent of Gen Y customers
said they had a positive experience with their bank, less than 26
percent reported a positive experience with their insurer. The report
also found that customers across all segments now accept digital
communications at the same level as conventional channels, with more
than half of customers placing a high value on company websites for
conducting insurance transactions, and more than 40 percent considering
a mobile app as an important channel.
Additionally, as new digital technologies enable innovative, value-added
services, almost 46 percent of tech-savvy3 customers and 38
percent of Gen Y customers are willing to receive proactive,
personalized insurance offerings through a variety of channels, which
could lead to new revenue opportunities.
BigTech firms are poised to take advantage of the insurance
industry's missteps
The large, multinational technology organizations that represent BigTech
are taking slow, deliberate steps towards establishing a presence in the
insurance industry by leveraging their strong reputation for superior
customer experience. Globally, 29.5 percent of customers said they would
consider buying at least one insurance product from a BigTech firm,
which isa 12-percentage point increase from 2015 when only 17.5 percent4
of customers indicated willingness to purchase insurance from BigTech
firms.
Gen Y and tech-savvy segments appear most inclined to switch loyalties
from traditional insurers. These customers not only cite lower positive
experiences with traditional firms, but they are also more likely to
change their insurance provider within 12 months and are more open to
purchasing insurance products from BigTech firms.
Evolving customer preferences drive insurer investments in digital
agility
Disruptions from environmental, technological, and organizational
factors along with the ambitions of BigTech companies are making
digitally agile operating models a necessity. InsurTechs, new insurance
firms that use technology innovations to focus efficiencies and attract
specific customer segments, are leading the way with digital agility.
Collaboration between traditional insurers and InsurTechs is essential
for the efficient and cost-effective development of digital capabilities
across the industry.
More than 80 percent of insurers cite evolving customer preferences as
the most critical factor driving digital agility, and their investments
provide insights into the industry's future. Almost two-thirds of
insurance firms are testing smart watches and wearables, more than
one-third have deployed telematics, and more than 55 percent are
investing in speech recognition and blockchain, with robotic process
automation currently the most highly deployed core digital technology
among them.
"To gain value from their investments, insurers must think about the
big picture and develop a holistic approach that is strengthened by
InsurTech capabilities, rather than piecemeal adoption," said
Vincent Bastid, CEO of Efma.
Digitally enabled, future-ready operating models ensure long-term
sustainability
To succeed in the digital era, the report highlights that insurance
firms must foster digital agility and develop operating models to
deliver a superior customer experience, bringing together the best of
digital and traditional channels. For example, more than 65 percent of
surveyed respondents said end-to-end personalization of the customer
journey was their highest need. However, to enhance the customer
experience with personalization, insurers need a digitally integrated
ecosystem that seamlessly interconnects insurers with customers and
partners, in order to enable an efficient flow of information and
services.
A digitally integrated ecosystem supports the real-time, personalized
services that customers are growing to expect and demand. With enhanced
digital agility, insurance firms can gain greater insight into customer
needs and improve time to market for innovations, while driving greater
operational efficiency and cost savings the report concludes.
About the World Insurance Report 2018
The World Insurance Report (WIR) 2018 covers all the three broad
insurance segments?life, non-life, and health insurance. This year's
report draws on research insights from 20 markets: Australia, Belgium,
Brazil, Canada, China, France, Germany, Hong Kong, India, Italy, Japan,
Mexico, Netherlands, Norway, Singapore, Spain, Sweden, Switzerland, the
United Kingdom, and the United States. The survey provides insight into
customer preferences, expectations, and behaviors with respect to
specific types of insurance transactions.
For more information, explore the report website at www.worldinsurancereport.com.
About Capgemini
A global leader in consulting, technology services and digital
transformation, Capgemini is at the forefront of innovation to address
the entire breadth of clients' opportunities in the evolving world of
cloud, digital and platforms. Building on its strong 50-year heritage
and deep industry-specific expertise, Capgemini enables organizations to
realize their business ambitions through an array of services from
strategy to operations. Capgemini is driven by the conviction that the
business value of technology comes from and through people. It is a
multicultural company of 200,000 team members in over 40 countries. The
Group reported 2017 global revenues of EUR 12.8 billion.
Visit us at www.capgemini.com.
People matter, results count.
About Efma
A global non-profit organization, established in 1971 by banks and
insurance companies, Efma facilitates networking between
decision-makers. It provides quality insights to help banks and
insurance companies make the right decisions to foster innovation and
drive their transformation. Over 3,300 brands in 130 countries are Efma
members.
Headquarters in Paris. Offices in London, Brussels, Barcelona,
Stockholm, Bratislava, Dubai, Mumbai, and Singapore.
Visit www.efma.com.
1 BigTechs refer to large, multinational technology firms
such as Google, Amazon, Facebook, Apple (News - Alert), and Alibaba.
2 In the context of the report, Gen Y customers are
categorized as individuals aged 18 to 34, while Non-Gen Y
represent customers aged 35 and older; these groups are Mutually
Exclusive and Collectively Exhaustive (MECE)
3 In the context of the report, customers that use online and
mobile channels frequently to conduct transactions such as purchasing
electronics, clothes, food and groceries, paying bills, etc. are
categorized as Tech-Savvy; Tech-Savvy and Non-Tech-Savvy
customer segments are MECE. Gen Y and Non-Gen Y, and Tech-Savvy
and Non-Tech-Savvy customer segments are not MECE
4 Capgemini WIR Voice of the Customer Survey, 2015
View source version on businesswire.com: https://www.businesswire.com/news/home/20180521006130/en/
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