This is Part I of a three-part series. Make sure to read them all.
Every industry is changing and the insurance industry is more so. The industry, largely governed by customer experiences and expectations, has seen yet another drastic shift in gears in the recent past, thanks to the Covid-19 pandemic.
Patrick Van Brussel, research director of the European Financial Insights team and lead of the IDC Worldwide Insurance Digital Transformation Strategies advisory service, in an interview sponsored by Aspire Systems to the IDC, explains just by how much the pandemic has fueled this change in customer expectations and behavior.
Drivers of change in customer expectations at play today:
The drivers of change in the insurance industry are many, says Van Brussel, the most important of the lot being technology innovation and the rising competition that comes with it. Cloud-native insurers and big data companies are posing fierce competition to legacy insurers who are just about adapting to the digital way of business.
All of these providers too, however, continue to be strongly steered by customer behaviors and expectations, says the analyst. Customer behavior and expectations have seen a dramatic shift in the past few years since the share of digital-native generations grew in the active population.
The way the digital natives interact with service providers, particularly insurers, is vastly different from the earlier generations of customers, says Van Brussel. ”For more than 200 years, the relationships between insurers and their clients have been based mostly, if not exclusively, on personal face-to-face contacts through agents, brokers, local offices, adjusters, doctors, and so on. But these times are waning,” he says. Gen Y and Z seek more flexibility in terms of accessibility and communication channels, he explains. The digital natives communicate with their insurers via multiple channels – visiting the agent’s office, calling the call center, leaving a message on the company’s web portal, e-mail, and through dedicated apps – all in the same day. The users also expect that the information from all these channels is updated in real-time from one stakeholder to the next for a hassle-free experience, says the analyst.
“As in all the other dimensions of their lives, customers now look for sustainable, 24 x 7, omnichannel, seamless, contextual, and personalized interactions,” Van Brussel says.
Frequent and constant service updates and upgrades, personalized offerings are also sought out actively by the new-age insurance customers.
The two-year pandemic has further fueled this customer behavior change and older consumers have also grown to appreciate the convenience the technological changes have brought in, says Van Brussel. “We’re all being merged into one unique “Amazon generation,” expecting the immediate delivery of any kind of tailor-made goods and services enabled by emerging new technologies such as data analytics, predictive modeling, artificial intelligence (AI), natural language recognition, or bots.”
The analyst has further insights for insurers about adapting to this change and the implications that come along. Keep reading our blogs for more.
Patrick Van Brussel has been working in the retail and commercial non-life insurance industry for more than 30 years as a senior manager, initially with ZURICH and later with ALLIANZ, with international experience in Belgium, France, the United States, Germany, and Italy, whether in local subsidiaries or at group headquarters.
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