At present 25% of the world’s population is made up of the Generation Y or Millennial, and by 2025 will account for 75% of the workforce. This means that the majority of the working population, that consumes and requires services. That segment of the population who mainly pay attention to (and it will be decisive) even the insurance world.
therefore creates some alarm the highlight of the current dissatisfaction of Generation Y with respect to the “customer experience” of insurance products: this appears from the World Insurance Report 2016 (download in full here) realized by Capgemini and Efma.
Despite around the world attention of the insurance companies for the new digital frontiers has resulted in a general improvement of the customer experience for digital natives is still not enough: if the index of the overall customer experience is at 74%, in itself not high and even improvable element, for the generation Y we are witnessing a decline in satisfaction to 67%.
More specifically in the report, the trend is in favor of the work that the insurance companies are doing to become digital, evolve, and meet the new market demands. This effort has gone in the right direction with regard to customers over 40 years, the global index CEI (Customer Experience Index) rose by 6.1 points between 2014 and 2015, with small differences between countries analyzed but substantially evenly: growth in Europe is very positive (the average 6.3, 5.0 in Italy) and Asia Pacific (6.6), much smaller is the increase in North America (4.8), however, resulted from a better starting position than anywhere else, In fact its CEI level is the highest, as shown in the table above.
However isolating the CEI data for the Y Generation segment, the conclusions are different.
Globally, only 33.9% of Millennial consumers, mentioned a completely positive experience with its own insurance provider (against 55.4.% Of non-GenY clients): The gap is wider in North America, Europe and Latin America, compared to Asian countries, although the country with the best index of customer experience (64.9%) is Austria. The worst is instead an Asian country, South Korea with 33.6% satisfaction.
The perception of a positive experience in the relationship with the insurance is definitely influenced by the Gen Y experience on digital channels: the Millennial communicates with their own providers twice as older generations, using all channels (including traditional ones like agent) but especially digital, many different digital channels, what they are looking for is the so-called “seamless” experience across several platforms and digital devices. Young customers, want to talk with insurance, much more often through the smartphone, tablet, computer, social media, through an app: this is how they buy, they interface for any explanations and problems, is from these channels they want be answered for their needs.
The agent is not entirely overcome by Millennial, but still has to find a new model and working process, because thanks to a clever use of data and analytics, he is able, more than ever, to customize the offer, and shape it on customer needs.
In this scenario, the challenge arises not only from insurance companies, but especially among traditional and new players represented by the insur-tech startup (the document quotes Oscar Health that we talked about here, and the Chinese Zhong An) as well as by large tech companies which decide to open up to the insurance industry.
If for those over 40-50, the image of solidity and reliability of traditional insurance companies may still make sense, this does not happen for Millennial, for which the purchase of an insurance product from Amazon or Google is a distinct possibility: 23.4% of respondents said they would buy insurance from a tech company.
The report also addresses the issue of new related technologies (wearable, connected car, IoT) and their impact on traditional business models of insurance companies.
The conclusion to be drawn, according to the report, is that the insurance companies can turn challenges into great opportunities, and on the face of Gen Y in particular, this turns into the ability to strengthen the relationship with this audience through all those tech-based methods that are already part of their lives and that they demand for: seamless experience, advanced technology, customized services.
In the video below a quick and efficient synthesis of the World Insurance Report 2016.