Is the Customer Experience for Global Insurance Consumers Up to Par?

Customer Experience InsuranceThe unfortunate answer to that question is a resounding no. Less than 30% of insurance customers globally are having positive customer experiences, according to the World Insurance Report (WIR) released by Capgemini.

Positive customer experience ratings globally dropped 3.7 percentage points from an already low 32.6% in 2013 to 28.9% 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).

“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 Customer Experience Insurancecompetitors and new entrants,” said Jean Lassignardie, Chief Sales and Marketing Officer, Capgemini Global Financial Services.

Generation Y, the customer segment between 18 and 34 years old, comprises one quarter to one third of the population in many markets, and this segment is crucially important insurance firms, the report says.

“Yet this tech-savvy generation presents a huge challenge for insurers, often demanding a high level of service across digital channels,” the report notes. “The WIR’s Voice of the Customer survey 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% and by 5.4% in developed Asia-Pacific.”

According to the WIR, insurers’ maturity levels are lagging among 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 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.

Reversing declining customer experiences means insurers must go beyond initial attempts to create a customer-centric approach and move toward 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 report shows that the agent channel is providing the highest levels of positive customer experiences.

Big Data Analytics is expected to have the biggest impact on the insurance industry with 78% of executives citing it as the key disruptive force, followed by regulatory change (46%) and economic uncertainty (42%). Other market disruptors include shifting demographics (35%), extreme environmental conditions (15%), new competition from non-insurers like Google and Amazon (22%), and advanced technologies such as the Internet of Things and telematics (21%).

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