FintechOS Reveals UK Consumers Want Better Insurer Rewards
FintechOS, the global technology provider for banks, insurance, and financial services companies, today revealed new research that shows 73% of UK consumers believe the customer experience (CX) in insurance has “stood still” for five years. After better financial terms, consumers will switch insurers in pursuit of a better customer experience, especially Gen Z (18-24 years old) and Millennial (25-39 years old) generations. The data comes from a survey of 1,000 UK consumers.
Key findings include:
CX has “stood still” insurance for the last five years
- Nearly two-thirds of respondents (73%), across all generations, believe the insurance customer experience has stood still for five years.
- While the majority of customers are dissatisfied with the customer experience. 31% of Gen Z respondents said the insurance CX had improved in the last five years, vs just 18% of Baby Boomers.
- So while insurers may believe that they need to invest to improve the CX for younger customers, it is in fact older customer groups that need attention.
Consumers will switch for a better customer experience
- After better financial terms (41%), consumers will switch insurers in pursuit of a better customer experience (15%). This rises to 19% for Gen Z and Millennial generations, highlighting the growing importance of CX for younger generations. Why?
- The arrival of digital-first insurance providers has dramatically changed consumers’ expectations around CX with but only for Gen Z (72%) and Millennials (54%).
- Nearly half (44%) of Gen Z respondents expect to use their mobile phone to access all services, 34% don’t want to use any paper forms and 27% will not wait or queue for service.
- For Gen Y (40-55 years old) and Baby Boomers, the arrival of digital-first insurers hasn’t altered their CX expectations. These generations care more about getting the best-priced service (46%) over a great customer experience (12%).
Loyalty, responsiveness, and personalization tops the list of frustrations
- Consumers are loyal to their insurance provider (four years on average), but they’re frustrated that they aren’t rewarded for this loyalty
- 42% of all respondents say not being rewarded for loyalty is the aspect of CX that needs improving most urgently.
- Nearly a quarter (23%) of consumers vented frustration with responsiveness, rising to 31% for Gen Z consumers
- And 23% “expect personalised services” and would like “guidance and advice specific to them” from their insurer
Consumers are understanding around Covid-19—but that doesn’t mean they won’t leave
- When it comes to the Covid-19 pandemic, 79% of consumers believe their insurance CX has remained the same during this time.
- When asked if they agree with the statement “The Covid-19 pandemic has changed how people want to access and use services and it’s inevitable that it will take time for the customer experience to improve” 57% of Gen Z consumers agreed, demonstrating sympathy.
- Although they are sympathetic, this doesn’t mean they’ll stick around—62% of Gen Z respondents said that the pandemic has made them more likely to switch providers.
- Baby boomers are least sympathetic, with only 39% agreeing with the statement. But ironically, they’re most likely to stick with their provider given the pandemic (70%).
“The fundamental challenge insurers face is that they operate in a highly commoditised market, where consumers face a sea of overwhelming choice, along with price comparison websites to help them navigate it. The reality is that customers are only basing their choice on cost, with our research validating what we all know to be true,” said Teo Blidarus, Co-Founder & CEO at FintechOS. “The good news is that experience is the next biggest factor in deciding the choice of insurer. With customers only making contact with their insurers when they either need to make a claim – usually at a time of crisis – insurers need to use digital channels and customer insight to keep their customers positively engaged outside of times of crisis. This is the only way to differentiate in a highly commoditised market.”