Mobile and digitally interactive Gen Y consumers are threatening to change the way insurers deal with customers.
The Capgemini 2016 World Insurance Report found that Gen Y customers – due to their level of comfort with technology – are more likely to buy insurance from non-traditional insurers, with 23.4% keen to get insurance from a technology company.
There aren’t many ‘insurtech’ or tech-based entrants in Australia, but the country may be the next logical destination for these players following their success in other parts of the world, according to Dipak Sahoo, Capgemini Australia’s insurance practice leader.
“Aussie insurers need to be aware of global insurtech companies. The next destination after they have proved their model in more mature markets will be mature markets in APAC.”
According to the report, traditional insurers have not been able to satisfy Gen Y customers’ high expectations and strong preference for digital and social media. Globally, only 33.9% of Gen Y customers have positive experiences with their insurers, compared to 55.4% of older consumers.
The report, which surveyed 15,000 customers in 30 countries, said the lower scores of Gen Y consumers highlighted the need for insurers to better understand the behaviours and expectations of this customer segment.
“Comprised of tech-savvy individuals born between 1981 and 2000, Gen-Y customers have yet to fully embrace a wide range of insurance products. Over time, however, they will become the industry’s core customers, influencing older generations and making it imperative for insurance firms to better understand and address their needs now,” the report said.
The report found that unlike older customers, Gen Y consumers embrace all channels.
“It is critical for insurers to provide them a consistent all channel experience across both traditional and non-traditional channels. Also, insurers need to work with their traditional channels like brokers to make sure the B2B2C model provides the same rich experience as their B2C model,” the report said.