Having recently purchased a new motor insurance product after buying a new car, my first port of call was to review insurance online via social media in order to get an understanding of what other customers have experienced (positive or negative).
After reading numerous posts, I visited an insurance aggregator to see the best available rates. After spending 20 to 30 minutes entering lots of personal details I was presented with a list of quotations that were higher than my expectations. I decided to call the top five brands listed, in the hope that I would be able to agree a much cheaper premium.
Two hours later and now in my fourth conversation, I finally managed to negotiate a satisfactory premium, but not without difficulty. I was somewhat frustrated by the fact that I had to do all the work to get this package. I had to provide the insurer with all of the previous quotations I had been given in order for us to settle on the final cost.
Reflecting on my customer experience, and given the digital disruption today, it goes without saying that this process is somewhat backward. Given the time it took, I figured I could have comfortably completed the purchase online myself.
Are traditional insurers missing a beat with Generation Y?
Capgemini’s recently published 2016 World Insurance Report highlights that the next generation of young customers (referred to as Gen Y, born between 1980 and 2000) rely heavily on digital channels, and that traditional insurers are failing to develop a multi-channel experience that suits them.
The report highlights that service experience scores are poor, with only 33.9% of Gen Y customers recording a positive experience compared to 55.4% of non-Gen Y customers who feel satisfied. These results are interesting because insurance companies across the globe have been making a considerable effort to focus their attention on improving the quality of their service and engagement.
However, it seems that whilst they might have been addressing the needs of older generations, they have fallen short in meeting the expectations of Gen Y. As new and ultimately better competitors come into the market, it makes me question whether they have missed their opportunity in being able to capture the customers of tomorrow.
What alternatives are Generation Y Provided?
There is a huge opportunity for offering insurance services through desktop, mobile or social media. In the World Insurance Report, over 23.4% of Gen Y customers stated that they would feel comfortable purchasing their insurance through leading technology companies such as Amazon, Google and Oscar (US based company).
This should come as no surprise, as the likes of Amazon already offer a complete, reliable omni-channel shopping experience and tailored propositions such as life insurance. With access to extensive customer data and experience in analytics, they understand their customers’ exact needs which has allowed them to continue building excellent end-to-end buying experiences.
How can traditional insurance companies keep up?
The answer on this remains to be seen, although according to the report insurers can survive by mirroring technology- and innovation-led competition, or by forming partnerships to deliver in this new competitive landscape.
The Capgemini World Insurance Report states that in order to succeed in today’s “new normal”, insurers must integrate their contact channels, they must drive automation of processes and leverage big data and analytics for customer success.
Part 2 of this series will explore how insurers are leveraging some of these leading technologies to drive customer acquisition and retention.