PricewaterhouseCoopers (PWC) recently conducted a survey of 1400 insurance CEO’s from around the world. This survey has shown that customers and clients are the most important influence over business strategy decisions for insurance CEO’s. This should come as no surprise as consumer buying behavior has completely changed over time.
Customers demand more transparency from insurers, quicker claim processing times, and personalized communications. Insurance CEO’s believe that technological advances and demographic shifts have transformed these expectations of their business.
This PWC study highlighted a term being used more and more often today to address the change in consumer behavior – Uberization. Consumers expect quick, simple and dynamic ways to access goods and services using mobile apps. As more and more businesses offer mobile apps, there is additional pressure on all industries to offer this type of service.
Integrating mobile apps into the claim system allows consumers to have on-demand access to real-time information relating to their claim. Whether they are reviewing their claim history or tracking the payment process, an app gives them control. For insurers, this also reduces pressure on call centers, encouraging claimants to use self-service methods.For insurers operating legacy claims systems, meeting these changing demands is proving to be increasingly difficult. Legacy systems often contain silos of data, with minimal data integration making it difficult to implement online services and mobile applications.
Mobile apps and social media allow customers to do things in the way they want, with minimal impact on businesses. In fact, customer reviews, both online and through word of mouth, are much more influential on other consumers than marketing from companies themselves. Insurers need to be involved in the online conversation to ensure they are addressing the needs of their target market.
It has been widely reported that millennials, or Gen Y as this demographic are more commonly known, are the biggest market opportunity for insurers. This demographic is very different to the Baby Boomers before them, both in mentality and in buying behavior.
This generation has grown up through the recession and entered the workforce right in the financial meltdown. The importance of financial responsibility is ingrained in their minds, increasing the awareness of insurance products. Although, there is a perception among Gen Y that insurance is expensive, over 50% of those interviewed saw the benefits of an insurance policy to protect themselves when necessary.
In line with Uberization, Gen Y are almost always online, with 81% of them owning a smartphone. 90% of this segment are almost always online and connected. This opens up a whole new distribution channel that has not been accessible to previous generations. However, while 34% of this generation will interact with an insurer online, the majority would prefer to speak to an insurance agent. There is a perception that it is easier to research online, make a decision and then speak to an agent before purchasing a policy for such an important product.
It is essential for insurers to understand their target demographic, to shape an overall business strategy going forward. Understanding the needs of Gen Y and altering the claim system to meet these needs, ensures success for insurers in the future.