A global pandemic was required to accelerate digital transformation in the life and annuity industries. COVID-19 caused major changes in the way we live and work, leading to consumers of all ages and digital abilities online, like it or not.
But the pandemic is not the only driver of change in the industry. Consumer behavior had already changed and research shows a profound change in their values, which are now more focused on health, safety and economic security.
These circumstances converged to give life and annuity carriers a unique opportunity to reinvent their digital insurance business. Consumers are now working in the digital space more than ever, so carriers must meet them there. They will need to use rich data and digital technology to provide fast and easy online transactions, new and improved products and services, and improved product distribution and services. They will need to go from a business model to a relational one that cultivates valuable and lasting relationships.
This digital change among consumers is here to stay. Younger generations, generally more digitally savvy and accepting technology in their daily lives, made the change before the pandemic. While the retention rate in the industry is still around 85 percent, our research shows that more millennia and younger consumers say they intend to change insurance companies in the next 1
Accenture Research shows that consumers expect more for their money and want control over their information. Three ways COVID-19 is to change insurance, Accenture 2020
Identify customers' needs, give them what they want
Under the old way of doing business, it would be difficult if not impossible to meet the new demands of digital insurance consumers . Traditional demographic information simply could not provide the insights needed to create new insurance products specific to their needs and needs. But in this new digital reality, insurers can collect large amounts of data that has never before been available to them via the Internet of Things, such as fitness tracking devices. Consumers also indicate that they are willing to exchange personal data for more customized products and services. This vast amount of data, when processed by artificial intelligence, can provide the clearest and most detailed consumer profiles ever.
Accenture surveyed nearly 50,000 consumers in 28 global markets. Our research showed that millennial and younger consumers between the ages of 18 and 34 expressed greater interest in digital offerings that help them make safer, healthier and more sustainable choices. And nearly 60 percent of consumers over the age of 55 said they would share significant data for personal services that help them prevent harm and loss, up 24 percent from two years ago.
Leading insurance companies use this customer information and invest in a better digital customer experience to differentiate themselves and win consumer trust and loyalty. In addition, our research shows that digital investments pay off in income growth, where managers see 13 percent more premium and annuity income than their subsequent counterparts (Source: Where is the repayment of digital innovation in insurance).
In the future, successful insurance companies will use digital technology to create a 360-degree view of their customers. They will meet in a digital insurance market deeply informed by rich data and driven by artificial intelligence, identify individual customer needs at a detailed level and provide products and services that are specifically tailored to them.
The new digital customer experience will go far beyond digitizing paper forms. It will be a completely new process of automation to improve intake and evidence collection. It will use predictable risk models to enable fluid-free insurance, which shortens claims decisions to hours, instead of weeks or months. It will use video to welcome new policyholders with the same warmth and personalization of a face-to-face meeting.
Good for Consumers, Good for Business
Digital capability combined with data analytics helps your business grow healthy, long-term customer relationships, potentially increasing lifetime customer value and opportunities through relevant offerings. Whether your digital strategy is to build or buy differentiating features, today's cloud-based digital insurance platforms offer the flexibility to do both. As a result, insurers not only improve long-term customer experience and increase lifetime value, but also reduce short-term operating costs. Learn how the customer experience can differentiate your insurance business and create profitable new opportunities. Let's talk.