Capgemini World Insurance Report 2020
Insurance trends are changing. Consumers across all generations are rapidly adapting to an increasingly digitised world and this has never been more apparent than during the current global pandemic. Digital adoption is key for businesses to continue evolving.
Capgemini and EFMA’s 2020 report focuses on the decision processes of policy makers and how their approach to insurance has changed. Thanks to an arsenal of online suggestions and reviews, customers now feel they have the tools to make their own independent policy decisions. Insurance companies must therefore think carefully about their current offerings and how they can compete in this new landscape.
The report identifies the key areas in which the insurance industry should focus to maintain relevance:
- Hyper-personalised, experience-led engagement
Generic products are no longer enough. Insurers need to provide tailored offering to their customers which suit their specific needs at various points throughout their life
- Staying up to date with the latest trends and technologies
Technology moves at a rapid pace. Instead of being viewed as a threat, this should be used to a business’s advantage. Insurers can benefit from collaboration with tech partners who can expand their tools and methodologies
- Real time data
Real-time customer data can help insurers gain powerful data to understand and support their policy-holders and allow them to achieve hyper-personalisation in their offerings
Whereas previously insurers relied on their established position to gain customer trust, they must now take an active, engaged role in understanding their customer needs hence retaining and maintaining their relationship. This is not a time for complacency.
The report analyses the new entrants currently disrupting the insurance landscape:
- BigTechs such as Amazon, Apple and Google
- Chinese BigTechs such as Tencent whose insurance platform had insured more than 25 million customers by the end of 2019
- Product manufactures such as TESLA who are able to collect real-time customer data and use this to create bespoke policies
These competitors are able to offer the technologically advanced, hyper-personalised approach in which the traditional insurance industry is deficient.
Interestingly, the report also draws upon the fact that the industry is widely ignorant of these deficiencies. Despite the research revealing the importance of personalised policies, half of insurance executives interviewed implied product-fit was not necessarily critical to experience-led engagement. The evidence also showed a significant demand for usage-based insurance yet only half the insurers interviewed had rolled out usage-based insurance options. Solving this disaccord between a business’s customer perception and actual customer need is critical.
While the threat of this digital evolution can seem daunting, Capgemini’s report provides valuable information on how to assess your firm’s strengths and weaknesses and compete in a fast changing environment. The full report is available for download here.