In our recent whitepaper, we explored the new type of insurance customer challenging the industry to modernise – the Gen Y-ers (or Millenials). Here we present a brief summary.
Customer-centricity no longer entails what it did a decade ago. With the rise of advanced automation technology comes the rise of new business practices, new disruptors, and most importantly, new types of customers. Companies have increasingly incorporated digital innovation in customer interactions in order to speed up wait times and improve convenience. Now used to such advanced practices in other business relations, consumers have begun to expect the same services in the realm of insurance, galvanising carriers into action.
Generation Y consumers, born roughly between the early 1980s and mid-1990s, grew up in an unprecedented age of technology. Already they’ve achieved a higher degree of connectivity than their generational predecessors, and expect the same from their insurance providers. The insurance industry, in turn, is under immense pressure to modernise according to their expectations if they have any hope of retaining customers.
So, what works, according to Gen Y? Their expectations of service providers and the digitally-fostered ease of transition make them the “least loyal” generation. When it comes to insurance, only 49% are sticking with their current providers and reluctant to switch (as compared to 67% of Gen X-ers and 71% of baby boomers). With less than half of the generation’s insurance customers loyal to their current provider (and only 29.5% currently satisfied with them), habits towards technology could account for the generational differences. Instantly connected and able to independently compare rates and policies per insurer, Gen Y can weigh more options than ever before. As a result of the service they receive from digital heavyweights like Amazon, Gen Y expects the same from insurance: shorter wait times, rapid resolutions, convenience and transparency.
Therefore, incumbent insurers and new players alike must be more customer-centric and digitally accessible in order to appeal to a new age of consumers. The claims process is the insurer’s most central cog and naturally the one most lucrative to innovate. It’s a deciding juncture in the policyholder’s journey, and one that necessitates most contact between both parties, yet it’s remained largely unchanged in the past decade from a customer’s perspective. As speed and convenience are top priorities for millenials, insurers should look to artificial intelligence to update their practices.
Automation through AI means speeding up the claims handling time for customers in need, thanks to developments in computer vision and natural language processing (NLP) techniques, which allow a computer to read and extract key information from customers’ forms. It also provides customers with more accessibility online by allowing customers to upload and share a variety of documents for a claims resolution, providing quick and immediate answers to queries through chatbots or instant messages, as well as digitalising online portals for customers to purchase and manage their accounts directly.
It’s not enough to simply have customers in today’s age. With the abundance of competing services and customers’ technology-driven habits and expectations, the aim of insurers must evolve to attract, satisfy, and retain their customer base through the incorporation of advanced technologies like artificial intelligence. Improving the claims process through AI is crucial to improving customer relations, but just the start. By digitalising each aspect of a customer’s experience from web services to policy comparison, sales, interaction and, of course, claims, insurance companies can satisfy the expectations of all customers, and retain them, regardless of generation.