Three trends to achieve customer centricity in 2023


Capgemini’s 2023 Property and Casualty Top Trends Report named customer centricity one of the significant themes for the P&C industry in the coming months.

“Inflation is probably the key driving factor in terms of how much premium increase customers can afford as we go into 2023,” said Saurabh Kulkarni, vice president of market development – insurance at Capgemini, a global consulting, technology services and digital transformation firm.

“The challenge for insurers is managing claims losses in a way where your combined ratio doesn’t go through the roof. The easiest way to offset is to increase premiums, but that puts pressure on customers in this inflationary environment. So where does it stop?” Kulkarni told Insurance Business. “I think that’s going to be the biggest conundrum that insurance companies need to solve.”

How will insurers achieve customer centricity in 2023?

Insurers will focus on customer centric strategies to thrive amidst complex economic conditions next year. But what does it really mean to be customer centric? Kulkarni sums up this strategy succinctly: “It’s about providing the right protection, at the right time, using the right channel.”

“This helps insurers get to the customer’s needs faster and understand the market pressures better,” the executive continued. “During the pandemic, they realized that there are several ways that customers’ demands are changing.”

To adapt to these changing market demands, P&C insurers will achieve customer centricity by enabling the following:

Embedded insurance

This type of insurance has been buzzed about for months and will be a focus for insurers next year. Bundled with products and services and sold through third-party platforms, embedded insurance provides real-time, personalized coverage and a seamless experience for customers. Additionally, embedded insurance helps to close the protection gap and reduce distribution costs for insurers.

“If you look at car dealers, many are offering insurance at the point of sale. It sounds like a normal extension for any car purchase that you do, but it is still very nascent,” said Kulkarni. “Embedded insurance is about expanding the channels through which you can offer insurance to the customers.”

P&C insurers will ramp up partnerships with insurtechs and other ecosystem providers to embed their products. They’ll also invest in API-connected marketplaces to scale embedded insurance adoption.

Bespoke coverage

Technological advancements and an evolving global workforce have created new markets with unique insurance needs. Insurers will offer on-demand coverage and flexible solutions for these emerging sectors to gain a competitive advantage.

For example, the micro-mobility space (which includes small, lightweight vehicles operating at speeds below 16 miles per hour) is an underinsured market that auto insurers can capitalize on next year. Data by The Brainy Insights shows that the global micro-mobility market will grow from about $47 billion in 2021 to more than $200 billion at the end of the decade.

“In New York City, there are new ways to get around like city bikes or scooters – but how do you cover for those? Can an auto insurance product be extended to cover for this mobility solution? Do people need to purchase additional accident or health coverage?” Kulkarni asked. “Can we create a different product to adapt to these changing behaviours and address customer demands?”

Similarly, the gig economy will continue to grow rapidly; the number of gig workers worldwide will nearly double from 43 million workers in 2018 to 78 million in 2023. Traditional employee insurance doesn’t cover these workers, which means insurers must innovate to bridge the protection gap.

Risk-prevention offerings

Finally, P&C insurers will shift from being risk payers to risk preventers as they bolster their risk-mitigation offerings in 2023. This generates new revenue streams for themselves while increasing value for their customers.

According to Capgemini’s report, insurers that use “nudges” – digital tools that deliver risk prevention advice – will incentivize policyholders to adopt resilient behaviors. Capgemini’s research shows 43% of P&C carriers have leveraged data and analytics to help them better assess customers’ risk and encourage them to implement mitigation strategies.

“There’s a way for insurers to change the behavioural patterns of the customers by providing them prevention services,” said Kulkarni. “It’s also part of embedding yourself in the customer lifecycle. And so, it goes back to the thinking that if I keep the customer in the center, I can differentiate myself in the marketplace.”


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