Insurers risk losing competitive advantage if they don’t embrace digital

EY survey shows digital driving massive change in customer expectations

Toronto, ON (Oct. 22, 2013) – Insurers – slow to embrace digital – are missing the mark on delivering enriching experiences that customers now expect, according to a new EY survey.

“Insurers are being held back,” says Doug McPhie, EY partner and Canadian Insurance Leader. “Internal factors like legacy technology are hindering their digital progress – to the detriment of the consumer and, ultimately, the bottom line.”

In the Americas, 96% of insurers cite legacy technology constraints as a major impediment to growth.

“Insurers potentially have a wealth of data at their fingertips,” adds McPhie. “But without the right analytics, they’re missing a big opportunity to better understand their customer, and improve their experience.”

EY’s survey, Insurance in a digital world: The time is now, finds only 1% of insurers currently offer online rewards, discounts, apps or ‘live’ website assistance. They also need to embrace the mobile and social media wave.

“Insurers acknowledge their current low levels of digital maturity, and they know they need to take action,” adds McPhie. “They have high digital ambitions, but they’re still failing to communicate at critical times and missing opportunities to engage with their customers.”

The survey shows that the less advanced life sector is currently spending more on its digital strategy than the non-life sector. Seventy-nine percent of non-life companies spend less than 10%; in contrast, 68% of life insurers spend less than 10%. However, life insurers seem less concerned (46%) than non-life companies (60%) that customers will ultimately leave.

McPhie says, for both life and non-life insurers, digital is all about retention through improved customer experience.

“They need to deliver on new customer expectations, or risk being left behind,” he adds.

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Source: EY (Ernst & Young)