The World Insurance Report 2021 is an annual report from Capgemini and Efma which explores the challenges and opportunities of the current insurance sector. Featuring insights from three insurance surveys that all together cover insights from 25 different countries across the world, the report focuses on how distribution models are being challenged and reveals how technology and digitalization can channel effectiveness and revenue; finally, it also offers suggestions on what insurers can do to digitally empower their channels and expand their distribution ecosystem to enhance customer engagement and sales effectiveness.
First of all, the report points out how the pandemic and the emerging risks made the world more insurance conscious and boosted the adoption of digital channels, due to lockdowns and social distancing. Therefore, it suggests that insurers need to empower their distribution models thanks to emerging technologies, including augmented and virtual reality and AI, to provide better and more effective customer experience.
In order to do so, insurers should consider the so-called ‘CARE’ equation of insurance distribution:
• C: convenience – Digital channels are convenience leaders as they offer customers relevant information, a quicker response time, and 24/7 access
• A: advice – Agents and brokers can offer personalized advice from trusted providers to choose policies that are tailored to customers’ needs.
• Re: reach – the adoption of a particular channel by specific customer segments for research and purchase of insurance policy (with more than 30% of customers who leverage digital channels).
These three elements together will help insurers to innovate offerings, business models, and capabilities, to maximize distribution channel value and communicate efficiently in today’s fast evolving business environment.
Relevant for all three areas, as a key factor for change, is digitalization. The report traces a scenario in which more than half of agents and brokers worldwide believes that they need digital collaboration and engagement tools in order to assist customers. Among the digital improvements that made the difference in the last years, there are the 24/7 availability of services, ease of updating information for insurers, and search capabilities – while other digital tools that can improve customer convenience, for instance, are screensharing platforms, digital document-signing tools, as well as single-screen product comparison tools and digital illustrations.
At RGI we have been committing to help our clients offer effective and convenient customer journeys, both with our most recent developments and with our competence centers, Unimatica-RGI and Flexperto, two companies of our Group focused on customer experience and communication. Examples are the Customer Corner, which turns compliance into a business opportunity by allowing Insurers to exploit the regulatory compliance to offer better services and launch new direct channels faster, and UNISVID, the video collaboration solution that enables remote interaction with customers, automation of sales processes and remote advisory without requiring any type of installation by the end customer.
This last one is a very powerful tool as, even if 87% of insurers surveyed say they will invest in digital enhancements, only 32% believes digital channels are effective in securing sales, because they lack the personalized advice capabilities that an agent or broker has, especially for customers seeking complex products such as retirement plans and annuities for the which agents and brokers are still essential.
Also, this is why the report suggests insurers to embrace “digi-intermediation” – a process in which agents – the “human channels” – are digitally empowered, while virtual channels are humanized, thanks to sophisticated on-demand digital features.
To do so, the insurers of the future will have to collect essential information about policyholders and potential customers in order to offer a customized customer-experience and more effectively convert leads into sales. For example, APIs and AI-based analytics can help agents and brokers understand customer preferences, answer questions, and offer appropriate products around customers’ special life events. Finally, as a final goal, the report suggests insurers to make changes and improvements in order to reinvent their operating ecosystem and support a ‘phygital’ model, based on a mix of physical presence and digital features.
A powerful and flexible core system, which allows the interoperability of all the components of the Insurer’s ecosystem, is key to provide strong added value to insurers’ businesses, with digital innovations in business models, products and services that help them offer effective and convenient customer experiences, as well as face the challenges of the market.