Insurers need a truly digital customer experience to compete with “Big Tech” firms

Canadian insurers are failing to keep their clients happy, report says

This story originally appeared in Investment Executive.

As “Big Tech” companies begin making advances in the insurance industry, Canadian traditional insurers must ramp up their customer service, particularly since Canadians are less satisfied with their insurers than the North American average.

The 2018 World Insurance Report, published in partnership between Capgemini and Efma — both based in Paris — warns that its critical for insurers to become digitally agile if they’re going to compete with companies like Google, Amazon, Facebook and Apple.

Clients are certainly expressing a demand for more digital services. Specifically, more than 45% of Gen Y and tech-savvy customers in Canada cited the internet and mobile apps as important insurance-transaction channels.

As it stands, 22.8% of customers in Canada say they would consider purchasing insurance products from Big Tech firms.

“The use of data and being able to offer a truly digital customer experience are both critical for the insurer of the future, something Big Tech firms like Amazon and Google excel at,” says Anirban Bose, global head of financial services and member of the group executive board at Capgemini, in a statement. “The threat from entrants is more real than the insurance industry might want to admit. Insurers, risk assessors by nature, must urgently turn their gaze inwards and consider the competitive risks within their own industry in order to evolve and survive.”

Canadian insurers, in particular, are failing to keep their clients happy. Although Canadians, as a whole, have a more positive experience with their insurers than the global average (32.8% vs 35.6%), they’re less satisfied than the North American average.

For example, Gen Y Canadians have a 26% satisfaction rate with their insurers compared to 33.2% of Gen Y North Americans. Among all other demographics, Canadians are 40.1% satisfied compared to 46.% of North Americans.

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