By Vis Govender
More than a decade ago, it was believed that insurance was simply too complex an industry to ever go digital. Today, digitalisation has been identified as a key driver of value, innovation, and the development of the insurance industry. As such, we’re seeing insurers race towards the future by adopting emerging technologies such as Artificial Intelligence, machine learning, and automation to meet the evolving demands of consumers and provide a positive customer experience.
There is no doubt that service quality has a fundamental impact on a business’ market share and one of the biggest ways this digitalisation of the customer experience is being realised is through the incorporation of self-service technologies. Today with the exponential growth in digital penetration, the rise of chatbots and AI, self-service is increasingly defining the efficacy of service quality. In fact, the global self-service technology market size grew from $15 billion in 2015 to $28.3 billion in 2019 and is expected to grow at a compound annual growth rate of 6.7% until 2027.
Younger generations like Millennials and Gen Z are key drivers in the adoption of self-service tools and technology. They increasingly look for digital-first customer experiences which, subsequently, compels companies to adopt these technologies in a bid to better engage with this new customer base. In the insurance industry, this has manifested in the deployment of self-service portals which are enabling customers to access and manage their insurance policies, file a claim, or get answers to any urgent questions and queries.
However, because of the significant appetite from younger generations for more digitisation and less human interaction when it comes to engaging with businesses, there is a common misconception that older generations are on the other end of the spectrum – that they don’t like, understand, or are afraid of self-service technologies. But, it’s simply not as black and white as you might think.
Don’t Alienate Older Generations in the Bid for Digitalisation
With the significant purchasing power of younger generations [the largest generation in the world – Gen Z – having reached an estimated $100 billion] and the assumption that older generations are uninterested in digital interfaces, it can be easy to cater all self-service platforms to younger generations only. But this would be a grave mistake.
Yes, Millennials and Gen Z are more comfortable with newer technologies than older generations are, having grown up alongside these digital technologies. Whereas older generations such as Baby Boomers and Gen X, outside of a small tech-savvy few, are unfamiliar with these technologies and are often faced with challenges when learning to use them such as a lack of confidence.
If we look at the banking sector, for example, which has been a rapid adopter of digital and self-service technologies as a touchpoint with customers, Gen Z have never really had to walk into a physical bank branch to open a banking account, deposit or withdraw funds, or even speak to a financial advisor.
On the other side of the coin, however, Boomers have long been acquainted with the stress and difficulties of needing to speak to a teller face-to-face and having to set aside an entire day to go into the bank just because of the queues. It’s this unique experience with the challenges that come with the way a customer traditionally had to engage with a business that has driven the desire from older generations for the convenience and ease of access of digitally-enabled self-service.
In fact, recent studies show that Boomers are growing increasingly more comfortable with digital options, with one study noting that 85% of Boomers had said they wished more businesses had digital options available. A recent PlayUSA survey found that self-service had become a preferred purchase method. And though Gen Z, Millennials, and even Gen X consumers were in the lead in its adoption, Boomers were not far behind with 46% saying they preferred using tech-based checkouts.
Catering to Cross-Generational Needs
So, now that we know that Boomers are happy to use self-service where it enables convenience, we need to also acknowledge that there are some caveats to this. Older generations still hold some reservations about the loss of personalisation that comes from self-service interactions.
That same PlayUSA survey also found that 67% of respondents felt technology made it harder for people to connect in a meaningful way, 75% said tech-based interactions had contributed to a decrease in social skills and 31% said they felt lonely due to fewer face-to-face interactions.
As personalisation plays a critical role in ensuring that customers feel valued, it’s important to not lose this authentic connection with customers while enabling more convenience for them through self-service tools. Most people, across generations, like to have the option to speak to another human when needed – for instance, when dealing with any complex or sensitive issues. And, in the insurance industry, self-service is also not suitable for all types of transactions.
That’s why there’s a need for businesses to balance convenience with personalisation by enabling customers to use whatever means they prefer to communicate and interact with them. By considering how the technologies you adopt will impact your customer, alongside your business, you can ensure you are always providing quality customer service and support while innovating for the future.
Vis Govender is the Co-founder of Everything.Insure and Group CEO of FirstEquity Group