Will millennials challenge traditional insurance | KPMG | ZA

Will the surge of millennials challenge traditional insurance

Will millennials challenge traditional insurance

Will the presence of the Millennial in the customer base influence the traditional insurance industry? The short answer is yes. Millennials are the new age customer across all industries that surely challenge organisations to rethink their ‘business as usual.'

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Millennials

Millennials grew up in a digital media saturated world thus they are often characterised as being technologically savvy, resourceful with information and captivated by instant gratification. Most Millennials are between 22 and 36 years of age and they constitute 33 percent of the population within South Africa. In 2013, the spending power for this generation was approximately
R2 billion. It can be assumed that this will increase as these individuals mature.

Their early experiences with technology, having copious amounts of real-time information available to them and being shaped by convenience has influenced their behaviours, opinions and choices on which products and services to use. This, in itself, should coerce businesses of today to prioritise customer experience on the business agenda, enhance their product solutions, improve service levels and enable various channels of interaction with their consumers.

The fourth industrial revolution is here, being driven by the rapid introduction of diverse and disruptive technologies, creating enormous opportunities for both new and existing businesses. The South African insurance industry landscape is well developed and competitive, which places more pressure on insurers to find innovative methods to differentiate themselves in order to maintain or grow market share. Insurance organisations are therefore faced with the conundrum of how to better adapt their service offerings to support an optimal go-to-market strategy for this particular customer segment in order to reduce churn and gain a competitive advantage.

Millennials and customer behavioural patterns

The big four disruptive technologies known as SMAC (social media, mobile analytics, data and cloud) are maturing and being joined by newer ones like the Internet of Things (IoT) and advancements in artificial intelligence (which has enabled breakthroughs in cognitive automation (CA) and robotic process automation (RPA) – which is a necessity in the insurance industry due to the amount of back-office work when customers submit a claim. What this means is that business is now able to listen to and understand their customers in ways that were not previously possible. They can now engage with those customers on a breadth, scale, and level of detail that will allow them to become more responsive to their customer needs and to deliver more compelling customer experiences.

Millennials increasingly expect all of this as a standard offering. They expect preferred channels, and circumstances. They assume that information shared with one part of an organisation will be broadly available to employees in other parts. With this mind-set, consumers are more susceptible to conclude that, if an organisation does not make an effort to understand their unique individual needs, the organisation simply does not care about them as an individual. Needless to say, the reputational damage that can be made by an unsatisfied customer in this day and age has a critical effect on an organisation's brand image.

We believe that opportunities exist for insurance organisations to be forward thinking and proactive in the development and provisi on of a differentiated and customised customer experience for the Millennial segment.

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