We will talk about the reflections of Jaime Bofill in his Tribune for El Confidencial on January 19 and we will see the results released by the PWC and The Cocktail Analysis reports on “Insurance 2025 and beyond” and “Design keys for the new insurance customer”, respectively.
The PWC report reimagines the industry by focusing on trust, convergence and transformation as keys to avoid customer churn. We will see the trends that will determine the future in the sector and the imperatives that insurance companies must take into account when rethinking their strategies.
On the other hand, the Madrid based consultancy analyzes the current perspective of the insurance customer and the multiple challenges facing the industry. The sample was made up of various experts from different insurance companies, 1,014 online surveys through a panel, insights drawn from several studies on consumer attitudes and behaviors in the past year and the BrandAsset Valuator brand perception study.
Let ‘s start!
The customer at the center, but this time for real.
“We are still pending the creation and implementation of concepts
as essential as the insurance digital product.”Jaime Bofill. Tribune of El Confidencial. 2023.
The partner of CMS Albiñana & Suárez de Lezo anticipated at the beginning of the year the importance of the digitization of the insurance sector. Despite the relevance of insurtech and neo-insurers – wrongly called, according to him – it seems that there has not been a massive application of the latest technologies. Bofill is clear about it: 2023 is the year of the definitive takeoff of innovation in the Spanish insurance sector. “This is the moment” he pointed out.
Digitization cannot only consist of selling insurance policies online, but also, he affirms:
“We must follow the path set by the Asian and North American markets. It is a question of digitizing the entire system, the process of creating new products, progress and automation in the relations between mediators and insurers or, mainly, in the relationship with the insured. They demand custom-made products prepared digitally and easily accessed from an application on the mobile phone or on the web”.
In his forum he mentions that other markets are seeing advances in insurance distribution on the web 3 or in the metaverse. It seems that there is still a long way to go in terms of the creation and implementation of concepts as essential as the customized digital product or the financing of premiums without the intervention of banking entities. Lastly, he insists that, for insurance companies: “investing in innovation is a simple and achievable step for this year.“
The danger of maintaining inertia when facing new challenges
“A potential rise in the price of policies as a consequence inflation,The cocktail® Report: Design keys for the new insurance customer. 2022
will cause 85% of customers to immediately compare prices.”
The consultants assure that: “despite the radical changes that we have faced in recent years, the inertia and resilience of the sector have made the perception of the insured to be continuous.” The results are clear: only 26% of the users consider that insurance companies have provided good service during the pandemic. The lack of relevance is evident when compared to other sectors:
Customer satisfaction can become the boost that the insurance industry needs to face the change. We already know that “high satisfaction with the insurance creates a high willingness to renew”. Some of the products that customers request in order to increase their degree of satisfaction are: improvement of the customer journey, creation of ecosystems of services that facilitate the day-to-day life of the user and creation of loyalty programs.
“Loyalty programs are called to be the spearhead to increase satisfaction”, they say from the cocktail®. Almost 70% of policyholders who use these programs are satisfied with them, which increases the probability of retention. For this reason, to prevent inflation from “blowing up the bridge between satisfaction and renewal” it is necessary to take the appropriate measures.
Take action by digitizing the insurance sector
“This is an extraordinary and challenging time for
an industry traditionally risk averse and slow to change”.Pedro Diaz-Leant. Insurance Sector Partner, PwC Spain
The PWC report shows how insurers have intensified their transformation efforts, as the COVID-19 pandemic pushed many to increase their digital efforts. It was time to accelerate the adoption of new technologies, however, no major changes have been seen in its offer of products and services. The role of insurers as a provider of protection and peace of mind for companies and individuals requires extreme attention to the economic and social climate.
There is a trust gap on the part of the consumer, who currently shows a preference for flexible entities, capable of adapting to their needs and preferences in a changing world. To meet their demands, it is necessary to increase social justice. Greater financial inclusion must be offered, providing information to the end user and increasing their education on economic issues. Only then will your trust and loyalty increase.
Technology plays a fundamental role in taking care of all these aspects. From the possibility of hyper-personalizing messages and products, to offering greater transparency regarding ESG issues. In the report we can see how operators are developing their non-traditional distribution models and fully digital “insurance as a service” offerings.
We hope this summary has been of interest to you. Here we leave you a reflection from our CEO and co-founder, David Conde, regarding these predictions:
“To adapt to digital reality, the insurance industry needs more than ever to seekDavid Conde, CEO and co-founder of Coinscrap Finance
allies who have proven experience and technological capacity”.