Digitalization: Keeping the needs of policyholders in mind

Digitalization: Keeping the needs of policyholders in mind


Modernization of the backend, new products and digital services for customers: insurers are driving digitilization forward with countless projects. At the same time, it's important not to lose sight of what customers want.

The results of the "Insurance Consumer Report 2021," conducted among Swiss policyholders by Deloitte, essentially confirmed the observations that have already been made in other industries. Not every digital service offering is well-received by customers.

The experience of the retail sector is repeating itself

What retail companies like to call a "flagship store" today has little in common with a brick-and-mortar fashion store or supermarket as customers knew it just ten years ago. Digitization is playing an important role everywhere. Fitting rooms use AI to make product suggestions, "smart" mirrors present virtual outfits, customers take over staff duties and scan the products themselves at checkout. And some stores are open around the clock and operate completely without staff. Advances in technology seem to be limitless.

The only question is how all this will be received by customers. Past surveys have repeatedly shown that customers want digital services, but that their acceptance also has its limits For example, when a personalization technology is perceived as "creepy," customers reject it.

In other words: not everything that can be digitized should be digitized, although unfortunately, customers don't reveal exactly where the boundaries lie.

Personal contact is still important

The same limits also seem to exist in the insurance industry, as the above-mentioned survey by Deloitte shows. Accordingly, it is important for policyholders to understand the product before signing a contract. For 41 percent of those surveyed, personal advice is the most important source of information. Only 27 percent of those surveyed prefer to obtain information themselves. They use a variety of sources to get information, including apps and online services.

Consequently, these snapshots mean that insurers should be cautious in rolling out digital offers for product information and contracts. Otherwise, there is a risk of upsetting potential customers who prefer direct contact with an intermediary and advisor.

Prudence must also be the order of the day when setting rates. As the survey shows, only those under 30 are open to rates based on personal data such as location and behavior. The majority of those surveyed reject these rates.

In contrast, the picture is completely different for backend processes. For example, the majority of those surveyed would prefer the option to submit claims online. Provided that such processes meet their desires for convenience and simplicity. Those surveyed also cited time savings as a reason for using such services.

Yes to digitalization, but only if it's useful

The results of the survey can be summarized as follows: policyholders have a positive attitude towards digital processes if they can directly benefit from them.

This is only true on the surface. This is because it reminds us that the focus in developing digital services must be on what customers want, rather than on what is technically feasible and desirable (in terms of cost and efficiency) from the insurer's perspective.

Otherwise, insurance companies will have to experience the same things that many retail companies have already experienced. After trying something out for the first time, because it's a novelty, users lose interest. Or they reject the innovation because it was obviously chosen merely to shift the tasks previously performed by the insurer over to the customer.

If you would like to learn how insurance software can help you digitize your insurance business and position it for the future, feel free to contact our expert Karsten Schmitt.

Do you have any questions or comments? Then please leave us a comment.

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