A “striking chasm” exists between the expectations Gen Y customers have of insurers and the services that traditional insurers actually provide, according to the 2016 World Insurance Report.
The report, released by consultants Capgemini, calls on insurers to take a more aggressive approach in fulfilling Gen Y’s perceptions.
“Customer expectations are evolving faster than insurers’ ability to innovatively address their expectations,” the report states.
Gen Y customers are ushering in a new emphasis on technology-based services that may undermine standard business practices, while opening the way for new, more nimble competitors to make inroads.
“Although insurers around the globe improved overall customer experience levels, a generational disparity was evident, with Gen Y customers having much lower Customer Experience Index scores than older ones,” the report states.
“Globally, only 33.9% of Gen Y customers have positive experiences with their insurers, compared to 55.4% of non-Gen Y customers.”
The report states that the lower Gen Y scores highlight the need for insurers to better understand the behaviors and expectations of this increasingly important customer segment.
“Gen Y customers [prefer] to interact with insurers at least twice as more frequently than other segments, especially via new channels such as social media,” the report states.
“Gen Y customers have yet to fully embrace a wide range of insurance products, over time however, they will become the industry’s core customers, influencing older generations and making it imperative for insurance firms to better understand and address their needs now. “
There was good news for Australian insurers and customers in the report.
Australia ranks fourth in the world when it comes to the percentage of customers who had a positive experience (57.1%) with their insurers, holding its position after jumping up from eighth in 2014.
The nation also placed sixth on the customer experience index at 77.2 points – up 8.8 points from 2015 – on a scale of 0 to 100.
The report surveyed more than 15,500 respondents in 30 countries.