Home Breadcrumb caret Your Business Breadcrumb caret Tech Forget insurtechs: your next competitors will be Google, Amazon, and Facebook Just under one-third of customers globally (22.8% in Canada) are willing to buy insurance products from “BigTech” companies such as Amazon, Facebook and Google, a new report has found, suggesting a greater need for traditional insurance providers to “develop future-ready operating models to satisfy evolving customer preferences.” The World Insurance Report 2018, released earlier this […] By Jason Contant | May 28, 2018 | Last updated on October 30, 2024 2 min read Just under one-third of customers globally (22.8% in Canada) are willing to buy insurance products from “BigTech” companies such as Amazon, Facebook and Google, a new report has found, suggesting a greater need for traditional insurance providers to “develop future-ready operating models to satisfy evolving customer preferences.” The World Insurance Report 2018, released earlier this week by Capgemini in collaboration with Efma, found that “tech-saavy and Gen Y segments are notably more likely to make the switch.” It also said that within financial services, insurance trails banking and retail in delivering customer experience. While 41.7% of Gen Y and 35.1% of tech-saavy customers had a positive experience with their bank in Canada, only 26% of Gen Y and 26.3% of tech-saavy customers in Canada indicated their insurance experience was positive. “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 global report surveyed 10,000 personal lines customers in 20 countries, including Canada, covering all three broad insurance segments – life, non-life and health insurance. “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. In Canada, 22.8% of customers said that they would consider buying insurance from BigTech firms, a 10-percentage point increase from 2015, when only 12.1% indicated such a preference. Gen Y and tech-savvy market segments (defined as customers that use online and mobile channels frequently to conduct transactions such as purchasing electronics, clothes, food and groceries, paying bills, etc.) appear most inclined to switch loyalties from traditional insurers. These customers not only cite lower positive experiences with traditional firms, but they are also more likely to change their insurance provider within 12 months. “The threat from such entrants is more real than the insurance industry might want to admit,” said Anirban Bose, global head of financial services and member of the Group executive board at Capgemini. “Insurers, risk assessors by nature, must urgently turn their gaze inwards and consider the competitive risks within their own industry in order to evolve and survive.” Other Canadian survey findings: 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. Jason Contant Save Stroke 1 Print Group 8 Share LI logo