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The insurance customer of the future

Blog: Capgemini CTO Blog

In my last blog series, looking at the Insurer of the future, I looked at how insurers will change in response to new opportunities and changing customer demands. This short series will focus more closely on the changing demands of insurers’ customers, and looks at the insurance customer of the future.

Part 1 looks at who the insurance customer of the future will be. Part 2 will look at what they want, and part 3 will consider how they want it.

Part 1—Who will it be?

We should start by acknowledging two obvious truths:

1)     That there’s really no such thing as an “insurance customer” and that

2)     The customer of the future is already here.

What do I mean when I say there’s no such thing as an “insurance customer?” Just that there is a world full of customers, but they are all customers of multiple industries and sectors. No one is a customer of the insurance industry alone. And a customer’s needs and demands don’t miraculously change just because, in this particular instance, the customer happens to be thinking about insurance.

And how is the customer of the future already here? Because the customer of the future is what is typically called a millennial.

There’s no single definition of a millennial but, as I prefer round numbers to spurious accuracy, I’m going to take it to mean those people born between 1980 and the year 2000. The first of these are now in their late 30s, and those at the tail end are still in their late teens, so we can expect this generation to be significant insurance industry customers for the next 30 to 50 years.

So who are these millennials? What are the characteristics that define them compared to prior generations? I’ll highlight the four I see as most critical.

1)     Smart shoppers

Thanks to the internet and mobile technology, millennials have vastly superior access to data than previous generations. That makes them very smart shoppers. The data asymmetry that used to exist between insurers and their customers has gone, and the chances are that your millennial customer knows more about your competitors’ products and pricing than you do. If insurers don’t take account of that, they’re going to get surprised.

2)     Lower loyalty

The respect these customers have for longstanding institutions and brands is low. As a result, they have lower loyalty to any given provider. Just because they were your customer last year doesn’t mean you’re going to retain them this time around, especially if their smart shopping shows you’re no longer the best insurer for their evolving needs. Loyalty now has to be earned through a never-ending process.

3)     Self-centered

As far as the millennial customer is concerned, the customer is king. If an insurer is to engage with them successfully, it needs to do so on their terms. Millennials also have a short attention span. So if a millennial consumer wants something from an insurer, they typically want it now, not at some point in the future. And on the rare occasions that they do want it in the future, they want it at a time and place that suits them, not the insurer.

4)     Caring consumers

But these customers of the future are not entirely self-centered and fickle. At the same time as focusing hard on their own needs, millennials also have broader concerns. As a generation, millennials care more about the environment, about civil rights, and about poverty than their predecessors did. Insurers who take account of that, and who design, or re-design, their overall value proposition accordingly, will do better.

* * *

Please come back for Part 2—What the insurance customer of the future wants and Part 3—How the insurance customer of the future wants it.

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