The insurance sector must "reinvent" itself to catch up with the demands of modern consumers, specifically those members of the technology savvy Generation Y, according to a report from Capgemini.
Capgemini's latest World Insurance Report found a decline in customer satisfaction from customers, particularly from those members of Generation Y.
In North America, the percentage of customers with a positive experience from their dealings with insurers dropped 8.3% to 39.7% compared to 47.9% the previous year and Latin America fell 5.3% to 28.7% from 30%. In Europe, the figure stood at 30% compared to 33.4%.
Jean Lassignardie, global head of financial services, sales and marketing at Capgemini and he author of the report, explained to Post that this attitude has been formed by the way they connect with other brands.
This consumer segment, which is continually increasing in size, has become used to living their lives ‘on the go' and will choose an insurer that can fit in with their lifestyle and demands, Lassignardie explained.
The shift in expectation in today's consumers is "significant" Lassignardie added. He said: "Generation Y doesn't care about a brand or its history, they want it all now. And their expectations are not being met at speed."
Capgemini compiled its report after seeking feedback from 15,500 consumers from 30 countries around the world and its findings point to a global trend - customer satisfaction with insurance companies is waning.
Lassignardie said: "We have seen a sharp decline in international customer experience, and it is accelerating. There is now a completely different interaction agenda for customers."
A part of the problem, he explained, is that Generation Y "doesn't know" anything apart from the interactions they have with companies on devices such as smartphones.
Added to the insurance sector's history of "not being at the forefront" of technology, Lassignardie is not surprised that it is falling out-of-touch with such consumers.
This situation is not helped by the amount of disruptive technology that is on the market in the shape of smartphones and tablets. There have never been so many disruptive elements hitting the market at the same time, Lassignardie said, and insurers are simply not catching up with the technology quickly enough.
"The retail and distribution sectors have done very well to keep up," Lassignardie said, but insurers not so much.
Changing the way that they communicate with today's consumers will be a "huge, huge challenge" for insurers before customer dissatisfaction reflects on the balance books, but Lassignardie noted that the insurance sector is not at the stage "where it will collapse within 12 months" at this point.
However, Lassignardie reiterated that the change in consumer expectations is driving toward the need to change policy at "an unbelievable pace". He added: "It's a true reinvention."
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