Capgemini: Life Insurers Grappling with Digital Expectations

Share
Capgemini: Life Insurers Grappling with Digital Expectations
Capgemini report reveals 67% of top carriers ready to use generative AI, while legacy systems hinder industry-wide progress

Life insurers are grappling with customer experience challenges across all stages of the policyholder journey, according to a new report from Capgemini, a global consulting and technology services firm. 

The World Life Insurance Report 2025, published by the Capgemini Research Institute, highlights a significant gap between policyholder expectations and the services provided by most insurers.

The report identifies a select group of "best-in-class" insurers who have achieved superior customer experience metrics. 

These top performers have attained a Net Promoter Score (NPS) 38% higher than their industry counterparts. NPS is a widely used metric that measures customer loyalty and satisfaction.

Legacy Systems Impede Progress

Despite recognising the need for modernisation, only 41% of insurers met or exceeded their latest transformation goals. 

The report cites unexpected integration complexities, lack of alignment with business objectives, and insufficient skilled resources as primary obstacles to successful digital transformation.

Samantha Chow, Global Leader for Life Insurance, Annuities and Benefits Sector at Capgemini, says: “Life insurance is shifting from a must-have to a maybe proposition. Carriers must shake off the perception that life insurance is just 'death insurance'. 

“They can achieve this by focusing on engaging the next generation of policyholders, moving beyond a product-driven approach to put the customer at the centre of their strategies.”

Samantha Chow, Capgemini

Generative AI Offers Potential Solutions

The report reveals that 67% of best-in-class insurers are technically ready to leverage generative AI across their operations. 

However, the adoption of this technology presents its own challenges. One in three executives cited identifying talent as a significant obstacle, with critical gaps in roles such as behavioural scientists, experience designers and AI prompt engineers.

Customer Dissatisfaction Widespread

The research indicates that one in two policyholders find their experience with life insurers underwhelming. 

Specific pain points include:
  • Complex terms and lengthy application processes during onboarding
  • Long wait times and limited self-service options for policy changes
  • Complicated claim application processes and lack of empathy during claims experiences

Younger policyholders, aged 18-40, express higher levels of frustration with these issues compared to older customers.

Industry Faces Broader Challenges

The life insurance sector is confronting a 33% decline in penetration in mature markets between 2007 and 2023. 

This trend, coupled with high inflation and economic uncertainty, places insurers at a critical juncture.

Despite these challenges, the report identifies opportunities for improvement. Best-in-class insurers have implemented automated underwriting, self-service portals and AI-assisted claims experiences at significantly higher rates than their mainstream counterparts.

Samantha concludes: “Many insurers are struggling with legacy technology or investments that have failed to deliver the target returns. The path forward is a customer-centric transformation that draws inspiration from the best-in-class by embedding AI-augmented, human-touch service into core processes.”

**************

Make sure you check out the latest edition of InsurTech Digital and also sign up to our global conference series for our sister site – FinTech LIVE 2024.

**************

InsurTech Digital is a BizClik brand.

Share

Featured Articles

SecurityScorecard on Cyber Risks in Insurance Supply Chains

SecurityScorecard’s report assesses cybersecurity health in the insurance industry’s supply chain across 150 top insurance firms

Advania Asks: Can the Lloyd’s Market Use Tech to Evolve?

Advania’s ‘Insurance at the Digital Frontier’ report explores how an era of digital reform will redefine the capabilities of the insurance industry

Qantev and INSTANDA Partner to Drive Digital Transformation

The partnership will empower insurers to launch new products, improve customer satisfaction and automate claims processing

How ESG Data is Reshaping Insurance Underwriting

Sustainability

Munich Re: Digital Health Records Cut Insurance Risk by 35%

Insurtech

Glia Survey Shows Contact Centre Tech Failing FIs & Insurers

Insurtech