Non-life insurers are being left behind by the rapid changes in customer expectations.
Cover has become increasingly commoditised and decisions over its purchase are almost entirely driven by price as many customers fail to understand or underestimate its value. Customers have access to more information than ever before, using social media and price comparison sites to compare policies, prices and claims experience. Whilst, at the same time customers demand simplicity and want quotes and prices at their convenience via the platform they choose, access to help when they need it and to only interact when renewing or making a claim.
Loyalty is reducing and customers will happily change insurer on a regular basis and have little desire to forge a lasting relationship. Where customers are looking at value rather than just price, they want policies tailored to their requirements and to be only paying for what they need.
But, few non-life insurers are able to meet these demands. Their focus on risk, ratings and products means that their understanding of their customers lags behind the advanced techniques being developed by internet and telecommunications businesses, and these shortcomings are opening the door to more customer-centric competitors, including the data-rich and tech-enabled entrants who see non-life insurance as a vulnerable sector that is ripe for targeting.
PwC surveyed 9281 consumers globally about what kind of non-life insurance they hold, their attitudes to buying non-life insurance digitally and what, if anything, would encourage them to buy non-life insurance this way. What emerges from this research is how strongly embedded digital already is within the market and the potential to take the engagement and commercial possibilities further.
Digital innovation has been the catalyst for customer revolution, but also offers opportunities to develop greater customer engagement, insight and experience to meet customer needs more effectively. Most insurers are still focused on e-commerce but, the leaders are developing longer lasting relationships by using their digital capabilities to gain enhanced customer knowledge and harnessing that information to profile customers more effectively, fine-tune underwriting and deliver customised solutions.
Far from just being another channel, the impact of digital is transforming what customers expect, creating fresh opportunities to get closer to the customer and moving non-life insurance from a price to a value consideration. Indeed, rather than a digital strategy, the key objective for insurers should be developing a business strategy for the digital age.