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As the digital divide across age groups erodes, make way for a digital-first world

Shane Cassidy
May 1, 2020

From baby boomers to millennials, more and more customers are using digital channels to conduct day-to-day transactions. It is only a matter of time, therefore, that digital channels are in demand for insurance interactions.

The term digital native may bring to mind millennials or Gen Z because these individuals grew up in the connected world – surrounded by tablets, smartphones, and virtual assistants.

These days, however, Gen X and baby boomers are catching up fast in their use of smartphones and a broad set of technologies that offer around-the-clock convenience and make life easier – think Amazon, Uber Eats, or Google Maps.

Digital adoption for all

In the United States, around 90% of Gen Xers and 70% of baby boomers owned a smartphone in 2019, compared with 93% of millennials. And as much as 76% of Gen X and 59% of baby boomers used social media, compared with 86% of millennials. Although Gen X and previous generations were slow to adopt digital transactions, they are on board now. The digital-channels-use gap between millennials and older generations decreased significantly in 2019, compared with 2018.

Customers who frequently make online or mobile app transactions (%), 2018-2019

Source: Capgemini Financial Services Analysis, 2020; Capgemini Voice of the Customer Survey 2018, 2019.

The COVID-19 pandemic has made social distancing the new norm and has provided the impetus for widespread digital use by all customer segments, which erodes the digital divide even further.

Connecting the dots for the insurance industry

Previously, millennials – more than older generations –said they preferred digital channels. In 2018, 52% of millennials surveyed rated mobile channels as highly important, compared with only 37% of older respondents. Responses were similar for the preference for website use – millennials 56% and non-millennials 49%.

Considering the significant uptake in digital channel use for day-to-day transactions by customers across generations, digital may soon become the most preferred channel for insurance interactions, too. Therefore, policyholders will expect a seamless digital insurance experience. Even for agents and brokers, leveraging digital tools to engage with customers better will be a core KPI because productivity can be significantly affected.

Keeping up with the times

A touchless experience is an urgent necessity, particularly now during the COVID-19 crisis. What does it mean for insurers? The time is now for straight-through processing and automation across all value chain stages of acquisition, underwriting, policy administration, and claims. Forward-looking insurers must shore up their digital capabilities to meet these requirements and to realize operational efficiencies. Technologies such as artificial intelligence, natural language processing, and intelligent automation are all tools to aid digital transformation.

Capgemini offers a digital FNOL (first notice of loss) solution that provides policyholders with digital-channel convenience. What’s more, insurers can realize operational savings of 25% -40% and improved agility and efficiency.

The World Insurance Report 2020 (set for May 14 release) explores the eroding digital divide, its resultant impact on policyholder behavior, and how insurers can foster experience-led customer engagement.

Register in advance for your copy at And, feel free to connect with me to exchange ideas about this topic.