The continued evolution of the Internet of Things (IoT) is driving insurers to undergo significant transformation, according to a new report by Capgemini.
The outsourcing firm’s Voice of the Customer survey claims that insurers risk falling behind emerging competitors if they don’t address this technology trend.
The report said IoT technologies are expected to transform traditional insurance business models, including everything from the way insurers connect with their customers to their fundamental assessment and management of risk.
It added that affluence is the most compelling factor in determining customer uptake of IoT technologies. Nearly 31% of affluent customers globally say they are likely to purchase insurance from technology firms – a percentage that increases to 47% for affluent Gen Y customers.
The study, which included more than 15,500 insurers worldwide, also found that Gen Y customers are much less likely to have positive experiences with their insurers compared to other age groups, despite communicating with them more frequently.
The report said that Gen Y customers interact with insurers up to 2.5 times more on social media than other customers and over two times more via mobile.
“Given that more than one-quarter of all customers plan to purchase or renew their insurance through digital channels in the next 12 months, customer experience levels among Gen Y customers is particularly concerning for the industry,” said the report.