Capgemini and Efma call on insurers to enhance customer experiences with tech investment

Insurers must rethink their distribution models and offer better, more technologically enhanced products, according to a study published by  Capgemini and  Efma.

The World Insurance Report 2021 noted that natural disasters and emerging risks such as COVID-19 are becoming more severe, while lockdowns and social distancing have spurred the adoption of digital channels. Insurers must respond to these trends by offering digital insurance products that help them manage these risks, it said.

It called on insurers to embed technologies such as augmented and virtual reality and artificial intelligence into their products and embrace open insurance, improving service, customer experience and value.

The report found that more than 60 percent of insurance executives believe COVID-19 affected their firm’s customer acquisition efforts. Around 40 percent of respondents cited an impact on customer retention.

To regain lost ground, insurers should consider the CARE approach, the report said, putting “convenience”, “advice” and “reach” at the heart of their products.

While 87 percent of insurers say they will invest in digital enhancements, only 32 percent say digital channels are effective in sales because they lack personalised advice capabilities. Digital channels are valued for being available at all hours and making it easy for insureds to update their information and search new products. The inability to offer personalised advice, however, means customers seeking complex products such as retirement plans and annuities still prefer dealing with human agents and brokers.

The report emphasised the importance of maximising convenience for insurance buyers, with ease and speed of access particularly important in improving convenience. While 77 percent of insurance executives said agents and brokers are their most prominent distribution channel, more than 40 percent of personal line customers experience difficulties contacting agents and brokers outside typical office hours.

Commercial lines and small-to-medium businesses (SMBs) did not see a significant difference in the convenience offered by agents and brokers, digital channels or direct channels. More than half of SMBs said their experience interacting with agents and brokers is convenient, while more than 60 percent found digital channels convenient.

Around 44 percent of agents and brokers said they need support from their insurers to ramp up their digital engagement capabilities. More than half of the agents and brokers surveyed said they need digital collaboration and engagement tools such as screen-sharing platforms and digital document-signing tools to better assist customers. Less than two-thirds of insurers said they provide agents and brokers with digital illustrations and single-screen product comparison tools to enhance customer experience.

The report argued that in the future digi-intermediation, where agents are digitally empowered, and virtual channels are humanised, will eliminate distribution gaps, enhance customer experience and optimise delivered value.

Agents and brokers said knowing more about policyholders and potential customers would enable them to convert leads into sales more effectively. APIs and AI-based analytics can help agents and brokers understand customer preferences, answer questions, and offer appropriate products around policyholders’ special life events.

Anirban Bose, chief executive officer (CEO) of Capgemini’s financial services and group executive board member, said: “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.”

John Berry, CEO of Efma, added: “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.”

The World Insurance Report 2021 features insights from the 2021 Global Insurance Voice of the Customer Survey and the 2021 Global Agents and Brokers Survey. These surveys gather insights from 24 markets, including: Australia; Belgium; Brazil; Canada; Cyprus; Finland; France; Germany; Hong Kong; India; Italy; Japan; Mexico; Norway; Portugal; Romania; Singapore; Spain; Sweden; Switzerland; The Netherlands; Turkey; United Kingdom; and United States.

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