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A third of insurance customers switch provider due to poor service

Following a survey of just over 2,000 people, 33 per cent claim they have switched insurers over the past two years because of poor service.

The findings come from information management specialist EDM Group, which also interviewed 112 insurance intermediaries and 43 senior executives. Nearly 15 per cent of insurance executives believe that the opportunities here are ‘huge’, and a further 38 per cent think they are ‘significant’. Meanwhile, 68 per cent of insurance executives think that more digitisation of information and data by insurers would help significantly and 18 per cent believe it would have a small role to play. The corresponding figures for intermediaries were 56 per cent and 29 per cent.

In terms of which areas offer the best opportunities for insurers to improve their efficiency, 53 per cent of insurance executives cited back office administration. This was followed by claims (44 per cent), customer retention (38 per cent) and underwriting (35 per cent). When the insurance intermediaries were asked this question, 68 per cent said back office administration, followed by 42 per cent who said customer retention and 22 per cent underwriting.

Craig Campbell, head of insurance sector at EDM Group said: “It is clear from our research that both insurance executives and intermediaries believe there is significant room for improving levels of efficiency and cutting costs in the industry, and that the digitisation of information has a clear role to play here. For this reason, we see this as one of our biggest growth markets.”

Some 42 per cent of insurance executives interviewed believe that insurers will be effective in improving their levels of efficiency over the next three to five years, compared to 12 per cent who don’t think this. The corresponding figures for insurance brokers are 27 per cent and 19 per cent.

EDM Group currently generates around 10 per cent of its revenue from the insurance sector but because of the huge challenges facing insurers with regards to information management, the firm is forecasting a dramatic increase over the next three years.