Traditional insurers must up their digital offering to compete with ’big tech’ firms, World Insurance Report suggests
Nearly a third of customers would purchase insurance from ‘big tech’ firms such as Amazon and Apple, according to this year’s World Insurance Report from Capgemini and Efma.
This marks a sharp increase of 69% since 2015, which the report said was driven by customer dissatisfaction with traditional providers and tech-savvy customers.
The report found only 25.7% of 18-34-year-olds and 28.6% of the ’tech-savvy’, those who regularly use electronics to make purchases, had a positive insurance experience.
And it stated: “In short, insurers must adopt emerging technology quickly to leverage its customer-experience-enhancing benefits and expand their business scope by breaking traditional customer-interaction limitations.”
As ‘big techs’ start to enter the financial services space, a warning was sounded that firms like Apple and Amazon would have “certain advantages” within the insurance sector through tech-based disruptive models.
Traditional insurers were told they “must prepare to counter the challenge”.
Increased digital capabilities and more flexible operating models were given as ways to meet this challenge, with greater collaboration with InsurTech recommended as a way to achieve this.
It added: “Now, more than ever, it is critical for insurers to accelerate digital adoption and become digitally agile to ensure long-term business sustainability.”
The findings come a day after Insurance Times revealed Insurtech CDL would offer its customer base of 50 insurers and 60 brokers an app to collate all an individual’s insurance policies in one place, designed to make purchasing insurance for the customer quicker and easier.