The longevity of older generations and the growing number of younger customers is putting pressure on insurers to offer a wide range of delivery channels that can meet the preferences of a broad range of demographics. Traditionally, call centers and insurance agents were used for all interactions between customers and insurers. Today, insurers also offer customers the option to purchase policies online through web applications, or through brokers, while claimants can use online portals to create claims and monitor their claim status and history.
Capgemini and Efma recently published the 2015 World Insurance Report (WIR), which examined insurance customer satisfaction levels globally. There was a distinct difference between the satisfaction levels of Generation Y (Gen Y) and other demographics surveyed. Gen Y is defined as consumers aged between 18 and 34. They have grown up in the technology age and use the internet, mobile technology and social media every day, and increasingly for everyday activities, such as real-time transport tracking, banking, and shopping.
Gen Y Expect More from Insurers
As regularly reported in surveys, customers expectations of service are closely linked to their satisfaction levels. As Gen Y have higher expectations of service from insurance providers, their overall levels of satisfaction are lower. Insurers are struggling to satisfy these customers who expect direct, personalized interactions through online channels. To offer this kind of service insurers need to invest heavily in advanced technology solutions, particularly when they are currently embroiled in legacy systems and silos of data.
As more service providers offer online digital services, consumer expectations are on the rise. Consider consumers who traditionally would visit the video store to hire a film. Today there are a whole range of options for consumers, such as Netflix, on-demand viewing right from your TV provider and online streaming.
Referring to the financial sector, some banks now offer apps and online channels allowing consumers to access their account information, with more advanced technology offering bill paying options, direct money transfers, loan forms and online loan applications. This on-demand service is raising consumer expectations in a sector dealing with sensitive information, similar to the insurance industry. Consumers think that if banks can offer this kind of service, insurers can also begin to offer customers access to claim information through these channels.
Global Satisfaction Rates
Although Gen Y are the most difficult to please, customers’ satisfaction rates with insurers have decreased globally among all demographics. As insurers struggle to maintain existing channels, adding new channels using the same available resources is over-reaching, and causing dissatisfaction among all customers.
The channel with the highest rates of customer satisfaction was the agent channel, while digital channels, such as social media and mobile offered customers a low satisfaction rating. As the agent channel is the original channel for all insurance queries, this would be expected. Insurers have been refining this process for a long time, and customers are used to the process, having been using it for some time.
Digital channels are continually changing, and customers expect more from these channels as technology progresses. Social media, is, in fact, the least effective and least important channel across the board, although Gen Y would consider this channel more important than other demographics. This makes it difficult for insurers to focus on social media when traditional channels are delivering better customer satisfaction.
Focusing on satisfying target markets is the key for insurers. If you’re selling life insurance to over 34’s in North America, they will be most likely to use the agent channel or call an insurer directly. Out of all digital channels, this demographic is most likely to use the internet on a PC, rather than using a mobile device or social media. Whereas, if you’re selling health insurance to Gen Y in North America, all channels are considered to be of similar importance.
Focusing on specific demographics will ensure customers expectations can be met, and satisfaction rates can improve globally.