Digital-only brands are faster and leaner and do not have the system legacies to hold them back. In regions such as China and Africa, providers are now able to build fresh from the ground up and market to consumers who nearly all have smartphones.

Customers worldwide are eager to engage with their insurers online – exclusive research by Consumer Intelligence for industry platform The Digital Insurer showed that among consumers in the UK, US, Hong Kong and South Africa, 81 per cent believe technology generally makes their lives easier. They are a receptive audience to digital change – around 62 per cent believe insurers use technology to improve customer service and nearly half (47 per cent) agree insurers are using technology to reduce the cost of insurance.

But they are not entirely happy with the digital reality they see from their providers – 76 per cent said there was room for improvement in how insurers use technology to improve their digital experience, and the global study found insurers were rated a mediocre fourth from bottom in a list of 10 sectors. Insurers did beat high street banks and high street retailers, plus furniture and homeware companies, when consumers were asked to rank the quality of online and digital services. But they lagged behind supermarkets, airlines, music companies, phone firms, TV and entertainment groups and digital retailers.

Insurance needs to change, and the digital transformation of the industry can only be achieved by listening to the tough messages that customers want to be heard.

The UK stands out for the wrong reasons

The global ranking would have been better if it was not for the UK. Sadly, it was the stand-out worst performer, producing deeply worrying results massively out of kilter with the rest of the world.

More than two out of five (42 per cent) UK consumers warned the industry is old-fashioned and out of date and just 27 per cent believe insurers provide first-class online and digital services. 

Trust in the insurance market is at an all-time low and UK insurance customers seem to have a very cynical view when it comes to the digital experience. 

However, not all hope is lost – it’s nice to see that 69 per cent of UK customers would be willing to engage with their insurer via digital if a portal was made available, while 59 per cent say that they would be more likely to use digital if insurers provided an easy and straightforward experience. Around three-quarters of UK motor insurance customers have access to an online portal, while 63 per cent of home insurance customers are aware of an online portal.

it’s crucial that insurers don’t just go digital and dump the humanity in the process

The message to companies is, however, clear: they need to raise their tech game. Part of the reason may be legacy issues, as in the UK it is necessary to build new digital systems on top of AS400 green screens. As I heard someone working in the digital arena say the other day: “If it’s on AS400, then by definition it is wrong.”

Look east for digital lessons

Legacy issues are not a worry in other parts of the world and China is firmly established as the region to watch, with its digital tech-first approach driven by a developing middle class. They have the advantage of a totally mobile customer base, along with huge volumes of data to help fuel Artificial Intelligence. The developments in China are literally mind-blowing. Anyone who talks about the US and Silicon Valley as being leading tech hubs is dead wrong, and one visit to Shenzhen will prove that. When you see what is happening in Asia it gives you some good clues about what is going to happen in the UK, Europe and the US.

I absolutely think insurers need to learn about Chinese digital platforms such as the messaging, mobile payment and social media app WeChat. They also need to look at apps such as Singapore-based Grab or Indonesian GoJek and insurtech platforms such as ZhongAn. The only way to do this is through immersion. Providers cannot sit and read this article and then believe they have all the answers. 

Keep the humanity

Consumers nowadays demand instant access to everything, with ease and for free. But they also want to feel like a human, so it’s crucial that insurers don’t just go digital and dump the humanity in the process. 

Insurance needs to change, and the digital transformation of the industry can only be achieved by listening to the tough messages that customers want to be heard

If insurers are working in a global market, then they need to understand that one standard approach won’t work all over the world. They need to be conscious of the opportunities they have to take a different perspective and to use that perspective to travel to different countries and get their own view on the world.

Insurance has a strong future, but it will change. The days of the large annual policy renewal are ending and customers in the future are more likely to want to take their risk in slices. The real challenge that insurers face is becoming part of the travel ecosystem so they can take on cover in slices and integrate with those who are supporting travel. This will answer the question ‘How can insurance go where the customers are? And how can it enrich the travel experience?’ The models we see in Asia around this space are indicative of a very different future.

Digital transformation is an opportunity, but I am not going to give up my humanity to technology; I am going to enrich it with tech.