At a time, when companies across verticals are trying every mean to enrich customer experience, one of the most strategic sectors - the insurance sector is finding it really hard to please the new-generation customers. A recent report by Capgemini suggests that over 70 percent of insurance customers globally do not have a positive customer experience. The study finds out a majority of these customers helped bring down overall customer experience ratings around the globe belong to Generation Y.
The decline was sharpest in developed regions, such as North America, where positive customer experience ratings for Generation Y declined by 10.9 percent, and developed areas of the Asia Pacific region which saw a decline of 5.4 percent.
“Falling positive customer experience ratings coupled with a growing number of market disruptors–such as Big Data analytics, regulatory change and economic uncertainty–threaten to shake the stability of the industry and require insurers to become fully customer centric or risk losing their customer base to competitors and new entrants,” comments Jean Lassignardie, chief sales and marketing officer, Capgemini Global Financial Services.
The Generation Y include customers between 18 and 34 years old–comprises one-quarter to one-third of the population in many markets, making it a very important customer segment for insurance companies, according to the report. This generation has grown up using technology and typically has high service expectations across digital channels, making the situation very challenging.
“Insurers are in danger of losing this important customer segment to more agile competitors unless they can improve their digital services and provide more personalized and fully integrated customer experiences regardless of preferred channels,” Capgemini researchers cautions.
One of the biggest problem, the study notes is that insurers’ maturity levels are lagging in core capabilities. In other words, insurers scored lowest at connecting and engaging regularly with customers, as well as having a complete view of customer data and relationships.
The report also found that most insurers connect with customers at only a very basic level. While insurers have embraced an omnichannel approach to service, the customer experience across channels was often disjointed. “Insurers continue to struggle to achieve a complete view of their customer relationships owing to deficiencies in their analytical capabilities. While most insurers are capturing and storing customer data, many are failing to capitalize on analytics to identify varying behaviors, preferences or a comprehensive and real-time view of their customers,” says the study.
The WIR reports that Big Data analytics is expected to have the biggest impact on the insurance industry with 78 percent of executives citing it as the key disruptive force, followed by regulatory change (46 percent) and economic uncertainty (42 percent). Other market disruptors include shifting demographics (35 percent), extreme environmental conditions (15 percent), new competition from non-insurers like Google and Amazon (22 percent), and advanced technologies such as the Internet of Things and telematics (21 percent).
“If you simply look at profit margins, you will think everything is positive for insurers,” says Patrick Desmarès, Secretary General of Efma. “But it’s clear from the lower positive customer experience ratings that insurers are failing to meet the needs of customers. This is especially concerning given the strong link between positive customer experience and customer loyalty and profitability and the game-changing impacts posed by marketplace disruptors.”
To avoid that outcome, insurers will need to focus on social media, online, and mobile channels to engage with their customers as these channels are rated as important by more than 50 percent of Gen Y customers in most regions, according to the WIR.
(This article was first published on cxotoday.com)