Capgemini and Efma’s World Insurance Report 2021, published today, finds that 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.
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. Therefore, 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.
According to the report, more than 60% of insurance executives surveyed said COVID-19 affected their firm’s customer acquisition efforts, and about 40% cited an impact on customer retention. 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. While 87% of insurers say they will invest in digital enhancements, only 32% say digital channels are effective in securing sales because they lack personalized 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.
“Insurers have an opportunity to convert digital traffic to sales by focusing on a hyper-personalized 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.”
“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.