Natural disasters and emerging risks such as the COVID-19 pandemic have become severe and more frequent worldwide, making consumers more “insurance conscious.” Capgemini and Efma have released the World Insurance Report 2021, detailing how the insurance industry can provide superior customer experience (CX) post-COVID-19 pandemic.
The World Insurance Report 2021 found that over 60% of insurance executives surveyed said the pandemic impacted their firm's customer acquisition efforts. Meanwhile, 40% noted an impact on customer retention. It also found that 87% of insurers said they will invest in digital solutions, but only 32% claimed digital channels are effective in securing sales because they lack personalised advice capabilities.
The report highlighted the significance of improving insurers' distribution networks with emerging technologies – including augmented and virtual reality and artificial intelligence (AI) – and embedding insurance in customers' daily lives by embracing open insurance.
According to the report, digital channels earned high marks for 24/7 availability, ease of updating information for insurers, and search capabilities. However, their inability to provide in-depth, personalised advice to customers seeking complex products such as retirement plans and annuities emphasised the significance of agents and brokers when purchasing these types of insurance.
Post-pandemic, insurers should also consider the “CARE” approach – where insurers apply Convenience, Advice, and REach on the designs and evaluations of their channels' effectiveness, the report said.
“Insurers have an opportunity to convert digital traffic to sales by focusing on a hyper-personalised virtual experience,” said Anirban Bose, the chief executive officer 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.”
According to the report, agents and brokers wanted to improve their digital engagement capabilities, with around 44% saying they need their insurer's support. Over half of the agents and brokers surveyed stated that they need digital collaboration and engagement tools, such as screen-sharing platforms and digital document-signing tools, to assist customers effectively. This aligns to insurance customer demands for ease and speed of access to information.
Almost 80% of insurance executives said agents and brokers are their most prominent distribution channel. However, over 40% of personal line customers surveyed found it challenging to contact agents and brokers outside typical officer hours, with lockdowns and social distancing complicating the service.
By contrast, 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 also rated their experience of interacting with agents and brokers as convenient, while over 60% preferred digital channels.
Agents and brokers explained in the report that customer convenience improves when digital illustrations and single-screen product comparison tools are available. However, less than two-thirds of insurers said they provide agents and brokers with these sought-after digital tools to enhance customer experience.
In the future, “Digi-intermediation” – a process in which agents are digitally empowered, and virtual channels are humanised – will eliminate distribution gaps, enhance CX, and optimise delivered value, the report said.
Efma CEO John Berry commented: “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.”