More consumers want to purchase insurance in light of Covid-19 pandemic says consultancy

There is an increased consumer demand for health, life and general insurance products since the Covid-19 outbreak began this year; the Capgemini Research Institute, the in-house think tank for consultancy Capgemini, has revealed a 10-percentage point increase in the number of consumers looking to buy insurance in the next six to nine month, compared to pre-coronavirus figures.

To take advantage of this demand, Capgemini advised insurers to develop personalised offerings, rather than one-size-fits-all approaches, as well as to design solutions that can help customers manage risks and their own coverage.

These details were published within the think tank’s latest briefing note, Covid-19 and the financial services consumer: Supporting customers and driving engagement through the pandemic and beyond, published in April.

Capgemini further found that amid the current environment of deep uncertainty, insurance customers are looking for more contact with their insurers.

The briefing note said: “The pandemic has created an environment of deep uncertainty. As such, consumers are feeling the need for greater personal interactions with their insurers to assess their coverage needs and plan for the future.

“This sentiment is reflected in our research. We found an increase in consumer interactions with insurers’ branches, agents, and brokers in the next six to nine months.”

Despite this yearning for human contact, Capgemini added that the current lockdown regime “emphasises the importance of digital channel readiness”.

Here, insurers are lagging behind the banking sector. Prior to the coronavirus outbreak, for example, consumer adoption of mobile apps was 18% for insurance, compared to 47% for banking. But, Capgemini thinks this is set to change.

“Our research points to a seven to eight percentage point increase in the use of insurers’ mobile apps and websites in the next six to nine months,” the firm said.

In order to feed consumers’ digital appetite, Capgemini recommended that insurers digitise customer-facing process; this can be achieved by having digital onboarding, contracts and e-signatures, while mobile payments can speed up the claims process.

Furthermore, insurance companies can use virtual agents or chatbots to meet increased customer support needs and refine existing applications.

Customer loyalty

Capgemini’s research also looked at customer loyalty – more than a third (36%) of consumers have found a new financial services provider during the coronavirus crisis, who they plan to stick with. This trend is more noted for those aged between 18 and 45.

The briefing note read: “With more than two billion people in enforced lockdown, anxiety and stress levels are high, with consumers’ emotions playing a key role in their decision making and loyalty.

“Our previous research into this issue in financial services found that the correlation coefficient between emotions and loyalty is 0.68, while the correlation between rational factors and loyalty stands at just 0.44.

“Our research found that loyalty is under pressure, with a significant number of consumers having found a new FS provider who they felt best met their needs during this crisis.”

Capgemini added that how firms respond to the Covid-19 pandemic will define how customers perceive them in future; with this in mind, insurers have an opportunity to focus on business goals and deliver on digital transformation.

Capgemini said: “How financial services organisations respond to the Covid-19 crisis will define how they are perceived by consumers for many years.

“It is an opportunity to deliver on their corporate purpose, playing a central role in helping anxious and distressed consumers cope with uncertainty and financial vulnerability, and demonstrating a renewed commitment towards sustainability goals.

“It is also an opportunity to accelerate the digital transformation of the sector, connecting front, middle and back offices to deliver a seamless digital customer experience that meets today’s fast-changing customer agenda.

“In these turbulent times, digitalisation will enable financial services organisations to build deeper customer connections and emerge stronger from the crisis.”