Digital dilemma for general insurers as new entrants poised to snap up customers
1 September 2015
- Sixty-two percent want to use their smartphones for general insurance (GI), but time-consuming data entry keeps uptake low at 9%;
- Three-quarters of consumers happy to use laptops and PCs for researching, buying and managing GI;
- Connected devices and telematics could be the winning combination that makes insurers ‘relevant’ to their customers.
General insurers risk losing their customers to new entrants unless they step up their digital game, according to new research from Deloitte, the business advisory firm.
Deloitte’s research – Insurance Disrupted – shows high demand for smartphone GI apps, but slow uptake. Across all age groups, average demand and uptake for these apps stood at approximately 62% and 9%, respectively. Appetite was highest amongst the 25-34 year olds (77%), and strong demand was seen even in the over 55s (57%), yet only 11% and 8% currently use their smartphones for general insurance transactions.
Richard Hurley, Deloitte’s financial services digital leader, said: “General insurance applications or claim forms often require a lot of detail. Having to type everything out on a smartphone can be quite tedious. It’s not surprising so few people use their phone to do so, nor is our finding that 74% of UK consumers are happy to use their computer for general insurance transactions. This is a missed opportunity for general insurers.
“Smartphones give insurers the chance to improve the customer experience, by automating claims data submissions. They also present a level of convenience a laptop can’t. Say a person has a minor car accident and wants to quickly submit their claim. With their phone, the individual can take pictures of the damage whenever and wherever they are and send it to their insurer. If the technology and systems are right, there’s no reason why real-time claims responses can’t become the norm. Start-up insurers unencumbered by legacy technology could be the first to achieve this and reap the rewards of more satisfied and loyal customers.”
Deloitte’s research shows telematics could increase in popularity if it helped people to manage risk, which is now possible for motor, home and even health due to new technologies. Twenty-nine percent of motor insurance customers want this service, but very few insurers offer it.
Richard Hurley said: “Telematics is unlikely to win many more customers in its current form, but it could with connected devices. This combination can help people to minimise losses; for instance, telematics gives connected home insurance customers the ability to limit water damage by turning off a leaking pipe from their smartphone. Also, early indications from our research show younger customers would be particularly keen for a health insurance service that detects potential issues and then provides assistance. For example, using a smartphone connected thermometer, health insurers can monitor users’ body temperatures, and other health data, to alert them to symptoms of a potential illness.
“This winning combination could make insurers more relevant to customers in a world of digital technology where, in contrast to insurance, popular services, such as mobile navigation apps, provide frequent and tangible benefits. Insurers that develop new connected devices will have a first-mover advantage.”
About the research
The online survey of 2,955 comprised motor (1,424), home (654) and health (877) insurance customers was conducted on behalf of Deloitte by YouGov plc on 2-7 April 2015.
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The information contained in this press release is correct at the time of going to press.
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