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Insurers must boost digital play on Covid-driven interest in sector: study

Over 60% insurance execs say Covid-19 affected their firm's customer acquisition efforts, 40% cited impact on customer retention

Insurance, digital
BS Reporter New Delhi
3 min read Last Updated : May 18 2021 | 2:57 PM IST
Insurers need to rethink their distribution models to offer uninterrupted service, superior customer experience (CX), and maximum value as the industry’s business dynamics continue to evolve, according to a new report by Capgemini and Efma. As natural disasters and emerging risks such as Covid-19 become more severe, and lockdowns and social distancing spur the adoption of digital channels, the world is more insurance conscious.  

More than 60 per cent insurance executives said Covid-19 affected their firm’s customer acquisition efforts, and about 40 per cent cited an impact on customer retention, the report found.

The report, titled "World Insurance Report 2021" suggests that to regain lost ground, insurers should consider the ‘CARE’ approach, where Convenience, Advice and REach are at the heart of designing and evaluating the effectiveness of their channels.  

The report includes insights from the 2021 Global Insurance Voice of the Customer Survey, the 2021 Global Insurance Executive Interviews, and the 2021 Global Agents and Brokers Survey. Together, these sources cover insights from 25 markets including US, UK, France, Germany, Hong Kong and India.

The report found that while 87 per cent of insurers said they would invest in digital enhancements, only 32 per cent said digital channels were effective in securing sales because they lack personalised advice capabilities.

Digital channels earned high marks for 24/7 availability, ease of updating information for insurers, and search capabilities. Yet, their inability to provide in-depth, personalized advice to customers seeking complex products such as retirement plans and annuities made it clear that agents and brokers are still essential for purchasing these types of insurance.

“The global impact of all-at-once digital adoption has changed the way insurers need to operate to satisfy their customers. Digital investment in connected channels is a critical ingredient for insurers of the future to be successful,” said John Berry, CEO of Efma.  

The report suggests insurers need to empower their distribution network with emerging technologies, including augmented and virtual reality and AI, and embed insurance in customers’ daily lives by embracing
open insurance, the report found.

The insurance customers surveyed said the ease and speed of access to information impacts the convenience of their experience. Seventy-seven percent of insurance executives say that agents and brokers are their most prominent distribution channel. However, more than 40 per cent of personal line customers said it was challenging to contact agents and brokers outside typical office hours − and lockdowns and social distancing complicate the situation.

Unlike personal policyholders, commercial lines and small-to-medium businesses (SMBs) did not see an appreciable difference in the convenience offered by agents and brokers, digital channels or direct channels. More than 50 per cent of SMBs rated their experience of interacting with agents and brokers as convenient, while more than 60 per cent rated digital channels convenient.

“Insurers have an opportunity to convert digital traffic to sales by focusing on a hyper-personalised virtual experience,” said Anirban Bose, CEO of Capgemini’s Financial Services and Group Executive Board Member. “Today’s customers expect interacting with their insurers to be easy, and providers need to ensure their channels enable a convenient and seamless customer experience. By investing in the right technologies, insurers can win and retain customers while empowering their agents and brokers to deepen relationships.”

Topics :CoronavirusInsurersdigital insurance

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