The World Insurance Report 2017 (WIR), launched today by Capgemini and Efma, shows the impact of new digital technologies on the insurance sector. Despite the initial confusion, InsurTechs offer a great opportunity for traditional players to evolve their business model.
InsurTechs are rapidly revolutionizing the insurance market. Of the more than 8,000 customers globally surveyed for WIR 2017, nearly a third (31,4%) said they have engaged with an InsurTech exclusively or in combination with existing channels to access insurance services .
Interviewees believe that the success of InsurTechs is due to the introduction of innovative and efficient services at an excellent quality-price ratio.
InsurTechs respond directly to the needs of Gen Y and the "tech-savvy", who are constantly looking for convenience, flexibility and customization in their relationships with insurance companies. This segment of consumers, in fact, has a much higher propensity to purchase the complementary services offered by their insurers and therefore represent a potential alternative source of revenue. However, the tech-savvy and younger generations are also generally less loyal, which is why it is important for Companies to develop and strengthen their relationships with these customers by offering as many touchpoints as possible, including digital ones, in line with the expectations.
Overall, however, customers are not ready to abandon traditional providers, as they are considered more reliable on topics such as security and fraud protection (45,9%), brand recognition (43,7%) and personal interaction (41,6%). Additionally, 39,8% of customers say they trust their insurer, compared to 26,3% of those who trust InsurTechs.
Insurers agree that there is a complementarity between InsurTech and traditional players, so interesting areas of collaboration are possible. Indeed, among the more than 100 Senior Executives of Companies surveyed in over 15 markets, the vast majority (75%) declared that the development of InsurTechs represents a valuable support for Companies in responding more effectively to the ever-changing demand for clients. Additionally, more than half (52,7%) agreed insurtech capabilities would help them design customized products and services quickly and efficiently.
Raffaele Guerra, Executive Vice President and Head of Insurance Market of Capgemini Italia, says: «Partnerships are increasingly starting to be seen as an opportunity to integrate the innovative services of InsurTechs within the insurance industry. InsurTechs can help traditional players overcome barriers such as outdated customer interactions, paper-intensive use and time spent entering data into systems. At the same time, traditional players can help insurtechs address challenges such as high customer acquisition costs and lack of expertise in risk management areas.
Efma's Secretary General, Vincent Bastid, added: «Consumers' growing confidence in digital technologies that support mobile apps, social networks, on-demand services and the like, makes it clear that the mass market has entered a new phase. The insurance industry serves the masses and therefore has to adapt to this new reality. Partnering with InsurTechs is a great way to incubate and accelerate digital innovation."
