Customers warming to tech giants selling insurance products
Published: May 28, 2018
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Industry News
While shifting technology is expected to disrupt insurance markets, insurtech is widely predicted to be the biggest threat to traditional insurers and brokers. However, many are overlooking the potential impact of massive tech companies, who may increasingly see insurance as a fresh avenue.
We have previously discussed how tech companies and automotive giants many explore their own auto insurance products alongside autonomous vehicle development. If tech giants like Amazon, Apple, Facebook, Microsoft and Google decide to become insurers, it seems Canadians will be along for the ride.
In the World Insurance Report 2018, released this week by Capgemini with Efma, it found just under one-third of asked customers from around the world would be willing to purchase coverage from a “BigTech” company. In Canada that figure was 22.8% and while it is modest, it is safe to assume customer openness to tech insurance companies will grow.
Certainly, once the tech giants turn their considerable marketing efforts towards selling insurance customers are likely to be further swayed. Insurance companies will face massive competition from companies with more resources than them. Interestingly, tech companies will not be reliant on insurance success, so will have a free swing at the market.
Canadian results from the report were followed by advice for insurance providers to work harder to engage customers.
“Though performing relatively better than the average, there is still room for the [Canadian] insurance industry to develop a better connect with customers to be on par with the leaders,” the Canadian results said. “Relatively lower positive experience across all demographic segments indicate that insurers have not been able to keep up with the fast rate of evolution of customer preferences and expectations.”
“The large, multinational technology organizations that represent BigTech are taking slow, deliberate steps towards establishing a presence in the insurance industry by leveraging their strong reputation for superior customer experience,” said a joint press release from Capgemini and Efma.
Other Canadian specific survey findings included:
- P&C and health insurers are relatively more active in capturing real-time data compared to life insurance firms.
- From a P&C insurer perspective, the Top 3 factors driving the need to enhance digital agility are evolving customer preferences (84.1%); rising pressure on margins and opportunity to improve efficiency (52.4%); and emergence of new business models (47.6%).
- More than 50% of insurers said their firms were piloting or deploying artificial intelligence solutions; and
- More than 40% of the surveyed insurers are expecting a payback time of 12 months or less for investments made in digital transformation/automation.