Insurers are not focusing on introducing digital business channels for fear of upsetting and disrupting advisers and intermediaries, according to Swiss Re-backed technology provider IptiQ.
The firm warned that regulatory interventions would further drive consumers to online channels as advised costs continued soaring.
And it also criticised the customer experience in the intermediated insurance market as a further detrimental approach.
Speaking at the reinsurer’s media day, IptiQ EMEA chief executive Andreas Schertzinger said: “The execution costs of retail insurance [are] still high and rather increasing.
“That distribution cost will become ever more transparent due to regulatory evolution and only with digital insurance… can we offer ever more customer centric and ever more tailored offerings to end customers.”
Schertzinger continued: “Incumbent insurers’ main source of revenue remains those traditional channels so digital insurance first and foremost poses competition to those existing channels and puts existing revenues at risk and perhaps upsets or even cannibalises traditional agent or distribution business.
“So there is an inherent channel conflict or portfolio conflict to bring insurance to the customer differently or price it differently.”
Unprompted or undesired sales
Schertzinger also took time to highlight some of the downfalls in the current advised market and explained that the digital insurance sector is experiencing 9% premium growth per annum in EMEA and will see an increase in asset numbers from $200m in 2022 to around $500m in 2023.
“The customer experience today is still not great in retail insurance,” he said.
“Forty percent of retail business is still sold very traditionally so through agents or even through telephone sales, sometimes still unprompted or undesired, and direct or embedded insurance still makes up a very small portion.
“Importantly, those moments of truth in insurance and claims are basically manual most of the time and not a fantastic customer experience.”
