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Insurers need to start using newer technologies: insurtech report

13th May 2021 - Author: Katie Baker

According to a new insurtech report from Capgemini and Efma, policyholders have become more cautious when taking out insurance, resulting in the need for insurers to empower their distribution network with newer technologies.

technology-global-economyAs natural disasters and emerging risks have become more severe, along with lockdowns and social distancing, digital channels have become increasingly popular.

The report noted that whilst 87% of insurers say they will invest in digital enhancements, only 32% say digital channels are effective in sales because they lack personalised advice capabilities..

Over 60% of the insurance executives surveyed said COVID-19 affected their firm’s customer acquisition efforts, and about 40% cited an impact on customer retention.

Digital channels earned high marks for having 24/7 availability, ease of updating information for insurers, and search capabilities.

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The policyholders surveyed said the ease and speed of access to information affect the convenience of their experience.

77% of insurance executives say that agents and brokers are their most prominent distribution channel, however, over 40% of personal line customers said it was challenging to contact agents and brokers outside typical office hours with lockdowns and social distancing making the situation more complicated.

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% of SMBs said their experience interacting with agents and brokers is convenient, while more than 60% found digital channels convenient.

Agents and brokers want to ramp up their digital engagement capabilities, and about 44% said they need support from their insurers. More than half of the agents and brokers surveyed said that to assist customers effectively, they need digital collaboration and engagement tools such as screen-sharing platforms and digital document-signing tools.

Agents and brokers said they need to know more about policyholders and potential customers to convert leads into sales more effectively.

The report also noted that APIs and AI-based analytics can help agents and brokers understand customer preferences, answer questions, and offer appropriate products around policyholders’ special life events.

AI-based analytical tools and a 360-degree view of customers is essential for a customised customer experience.

The most successful insurers will win and retain customers through reinventing their operating ecosystem to support a ‘phygital’ model based on a mix of physical presence and digital engagement.

Anirban Bose, CEO of Capgemini’s Financial Services and Group Executive Board Member commented: “Insurers have an opportunity to convert digital traffic to sales by focusing on a hyper-personalised virtual experience.

“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.”

John Berry, CEO of Efma added: “Insurers of the future will need to embrace digi-intermediation to eliminate distribution gaps, enhance CX, and maximise delivered value.

“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.”

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