Life insurers battle with buyer expertise – Capgemini

The Capgemini Analysis Institute’s World Life Insurance coverage Report 2025 highlights ongoing challenges within the life insurance coverage trade, significantly in assembly trendy buyer expertise expectations.

Legacy know-how is cited as a key barrier to progress. Nevertheless, a small group of life insurers globally have managed to ship considerably improved buyer experiences, incomes “best-in-class” standing.

The report famous that these insurers have achieved a 38% increased Web Promoter Rating (NPS), an 11% decrease expense ratio, and 6% increased income progress in comparison with their mainstream opponents over the previous three years.

The report additionally notes the pressures life insurers are going through, together with excessive inflation, financial uncertainty, and waning client curiosity. Between 2007 and 2023, market penetration in mature markets declined by 33%.

Buyer dissatisfaction is prevalent, with half of policyholders expressing disappointment with their expertise, significantly in areas comparable to product choices, onboarding, servicing, and claims processes.

Challenges come up all through the shopper journey. Throughout onboarding, 35% of retail policyholders discover insurance coverage phrases too advanced, whereas 27% are dissatisfied with prolonged software processes. After buying a coverage, 25% of each retail and group clients report frustration with lengthy wait instances, and 23% are displeased by the dearth of self-service choices for making coverage adjustments.

The claims course of, typically impacted by restricted digitization, poses additional challenges. One-third of retail policyholders face difficulties with advanced claims purposes, and 27% cite an absence of empathy throughout claims dealing with.

Youthful clients’ calls for

The report reveals that youthful policyholders, aged 18-40, expertise extra frustration all through the insurance coverage journey in comparison with these aged 41-60. Points embody gradual and sophisticated onboarding, restricted communication channels, and inadequate self-service choices.

Moreover, youthful clients demand extra claims flexibility, with 42% pointing to rigid payout buildings as a key concern, in comparison with 26% of older policyholders.

Whereas insurers acknowledge the necessity to redesign onboarding, servicing, and claims experiences, solely 9% have developed processes that seize information from a number of sources to ship customized experiences by most popular buyer channels.

Samantha Chow (pictured above), world chief for all times insurance coverage, annuities, and advantages at Capgemini, famous that life insurance coverage is shifting from a “must-have” to a “perhaps” proposition. She emphasised that insurers should transfer past a product-driven strategy to give attention to buyer engagement, significantly with youthful generations.

“Many insurers are battling legacy know-how or investments which have did not ship the goal returns. The trail ahead is a customer-centric transformation that attracts inspiration from the best-in-class by embedding AI-augmented, human-touch service into core processes,” Choe mentioned.

Efforts to enhance buyer expertise have stalled for a lot of insurers. In keeping with the report, solely 41% of insurers met or exceeded their transformation targets. Initiatives have been typically hampered by surprising integration challenges, an absence of alignment with enterprise aims, and inadequate expert sources.

Generative AI in insurance coverage

Regardless of these setbacks, a small group of best-in-class insurers have embraced new applied sciences, together with generative AI, to reinforce customer support. These insurers have automated many elements of underwriting and claims processing, enabling extra environment friendly onboarding and bettering the general buyer expertise.

For instance, 78% of best-in-class insurers have automated underwriting processes, in comparison with solely 15% of mainstream insurers, and the identical share supply policyholders entry to self-service portals, versus 13% of different carriers. Furthermore, 56% of best-in-class insurers present AI-assisted claims companies, in comparison with simply 3% of mainstream insurers.

The report additionally highlights the transformative potential of generative AI however notes important expertise challenges. Whereas 67% of best-in-class insurers are able to leverage generative AI, solely 25% of mainstream insurers are equally ready.

A scarcity of expert expertise, significantly in areas comparable to behavioral science, expertise design, and AI immediate engineering, stays a major hurdle.

The success of future transformation efforts will rely on insurers’ capability to successfully implement new applied sciences and entice, develop, and retain the required expertise. These that may mix superior technological instruments with expert professionals will probably be well-positioned to guide the trade towards a extra customer-centric strategy, it was acknowledged.

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