The study found that more than twice as many insurance firms than a year earlier (24% v 11%) recognized the need to update their technology and that keeping up with developments in technology was a key driver for improving their claims systems. Although 60% of insurance firms have not updated their technology in the past year, 67% of insurers said they will invest in technology during the next five years. The survey showed aging legacy systems hindered policy renewals and insurers increasingly recognise the need to use technology as a resource for customer engagement, to streamline processes and to help business growth. Some key findings
The key differentiator for millennials is the expectation of up-to-date technology. The research demonstrates that 26% of consumers who have made an insurance claim said their insurer seemed to be using outdated technology. This rose to more than a third amongst 18-24 and 25-34 year-olds (36% and 35% respectively).
For 18-24-year-olds, lack of communication (28%) would be more likely to prompt a switch to another insurer than a refusal to pay a claim (20%).
In comparison, 41% of all consumers from all age groups said refusal to pay a claim would prompt a switch to another insurer, up from 30% in 2015.
Ian Betley, Head of International Sales at DST Financial Services said: “It is essential for insurers to stay up-to-date with the needs of younger generations, or they risk losing business. In particular, that means engaging with their customers and understanding their communication preferences. In this highly commoditized market, the risk of customer attrition for insurance businesses is high given that millennials are likely to abandon their provider and search for an alternative if their communication needs are not met.
“For insurance firms, it is critical to continue to enhance their customer experience and the technology systems that drive it to improve the claims process. In addition, given that the cost of inflexible legacy systems and operating models can hinder insurers from competing on premium price, transformation and change is imperative.
“Ultimately, a satisfactory claims process isn’t enough. In the digital world there are precious few opportunities insurers have to engage with their customers to build loyalty and lifetime value – fewer still where the customer reaches out to them. Insurers need to utilise the claims experience to create compelling reasons to maintain loyalty. Excellence, from FNOL to completion, is the standard insurers need to aspire to if they want to stand out. It’s no longer just about the pay-out. While the research reveals an intention for insurance firms to invest in the future, the delay in acting to date is preventing the industry from building strong, long-term relationships with customers.”
The White Paper on Claims can be viewed here
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