Quarter of UK insurance customers will only use digital services

Opportunity knocks for insurers to offer increasingly personalised services as customers flock online

More than one in four (26.9%) UK insurance customers say they will only use digital services in future, according to new research from analytics leader SAS. The research also finds that, accelerated by the pandemic, 15% of customers started using a digital service or mobile app for the first time: around eight million people.

In addition, one in five (21.1%) anticipate using digital services in addition to in-person interactions. Opportunity knocks to use these new stores of digital data to deliver customers a much more personalised experience, in terms of both the service they receive and the premiums they pay.

The findings follow improvements in customer experience since the pandemic struck; only 18.5% felt it had got worse. The rest felt it had improved with similar proportions citing the fact it was quicker and easier to do transactions online or over the phone (19.2%) and there were better targeted offers and incentives on a more frequent basis (17.1%).

The research suggests that insurers must demonstrate how they are using data to improve the customer experience, thereby encouraging customers to share even more personal data. Overall customers are more willing to share personal data since the pandemic by a margin of nearly 10%. Around one in 10 (9.7%) of respondents said they would be more willing to share their data if it means a better customer experience. A similar percentage (12.3%) would be more willing to share if they were rewarded for doing so – e.g. via rewards, discounts or personalised offers.

Insurers that maximise trust through careful data management and excellent personalisation of services are best placed to benefit from more data sharing. However, this is only possible with the appropriate analytical technology, which will empower companies to always deliver the ‘next best action’ and, where necessary, respond in real time.

The risk is high for insurers who fail to meet expectations

While there are opportunities for insurers that get the customer experience right, there are risks for those that don’t. Across all industries, more than 50% of UK consumers said they were prepared to switch provider after just one or two bad experiences.

Fraud also remains a challenge for the UK insurance industry. Almost two-thirds (61.8%) of all those surveyed, cross-industry, are now either more vigilant when it comes to fraud or have experienced it personally. It falls on insurers to protect customers’ digital identity as in-person exchanges become less frequent and interactions increasingly take place online. Guarding against fraud is key. Advanced analytics running in the background is the best way to achieve this personalisation, while still maintaining a frictionless customer experience.

The opportunity to impress customers online must be seized

Insurers have a huge opportunity to understand and serve customers better thanks to the uptake of digital services, greater awareness of benefits such as a more streamlined, personalised service and an increased willingness to share personal data.

“The insights that can be gained from data produced by more digital interactions are key to insurers delivering more personalised and seamless customer experiences. Customers are increasingly aware of this; they want the benefits of a positive digital experience, and as a result, are becoming more willing to share personal data,” explained Paul Ridge, Head of Insurance, SAS UK & Ireland.

“But in order to extract these insights from data they need to leverage advanced analytics and AI so intelligent decisions are made, particularly at a time of need. Failure to deliver timely and meaningful interactions could be very costly, as customers are expressing a willingness to switch providers after only a few bad experiences.”

Read more about how customer expectations have changed across industries during the pandemic, and what organisations can do to meet them, by reading SAS’ research report Experience Disrupted: Is COVID-19 continuing to change customer behaviour?