World Insurance Report finds insurers with strong digital presence and a customer focus are 26% more profitable

Digital channels, especially mobile, are the greatest tools for insurers to increase profits and retain customers, according to The World Insurance Report 2014 released today.

Firms that embrace a top-down digital transformation with a customer focus are 26% more profitable on average, it found.  

The report, by consultancy Capgemini and not-for-profit Efma, also predicts that nearly one-third of insurers’ business will occur digitally within five years - 20% coming via online channels and nearly 11% via mobile.

Key areas for insurers to focus on include multi-channel integration, maximising social media and taking advantage of predictive analytics techniques, the report said.

Capgemini Global Finance Services chief sales and marketing officer Jean Lassignardie said: “Insurers who master both digital delivery capabilities and online services across different stages of the insurance life-cycle, especially claims payouts or policy acquisition where customers expressed needs for improvement, will gain the greatest competitive advantages.

“Mobile holds the greatest potential to move customers toward more profitable behaviour. Insurers dedicated to providing a positive customer experience via mobile will position themselves well to improve business performance.”

The report also found that only 32% of insurance customers globally reported having positive customer experiences with their insurer in 2013.

Its customer experience index, which analyses responses from more than 15,500 insurance customers, found that customers who have positive experiences are twice as likely to make referrals and 50% more likely to make additional purchases.

Efma secretary general Patrick Desmarès said: “Consistent, positive experience will help create a customer base that is loyal and ultimately more profitable.”   

According to Cagemini’s Voice of the Customer survey, digital improvements are most needed in the areas of claims servicing, claims payouts, and policy acquisition.

The report also reveals that agents are still the main channel for driving customer experience, followed by the internet and mobile. The preference for digital channels over traditional is highest among young customers (aged 18 to 34), particularly in emerging markets of the developing Asia-Pacific and Latin America.   

Insurance Times’s The Digital Insurer event will discuss some of the issues raised in this report as insurers transform their business into the digital age.

Held on 29 April at the Royal College of Physicians in London, the event incorporates breakfast roundtables, special presentations, panel debates and a networking lunch. 

AXA chief executive commercial lines and personal intermediary Amanda Blanc will present the keynote on her vision of digital insurance.

“Digital should and must impact every aspect of the modern insurer from marketing and distribution to claims and underwriting and everything in between,” Blanc said.

“The Digital Insurer is a great opportunity for the market to debate the challenges and opportunities that moving to a digital framework throw up and how we as a market can improve delivery for our customers.”

Other senior panellists include UK General Insurance group chief executive Peter Hubbard, Ageas UK chief executive Andy Watson, and AIG UK and Israel managing director Nicolas Aubert.

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