DXC Technology Study Reveals Tipping Point for Digital Insurance in Australia
News Release -- September 25, 2019
SYDNEY, Australia, 25 September 2019 - A survey of 2,100 Australians by DXC Technology (NYSE: DXC) and emerging-technology analyst firm Telsyte has revealed that while the tipping point for digital insurance acceptance is here, the insurance industry’s reputation may slow the realisation of digital transformation due to customer reluctance to share data.
Although customers generally expect to save an average of 16 percent on policies from digital insurers, one-third of respondents expected premiums would rise on average by 13 percent, perhaps anticipating that more data would negatively alter their risk profile. Of the non-financial factors influencing choice and loyalty, personalisation ranked highest — twice as high as having an assigned personal agent.
“Despite data being a key component of digital insurance, the industry’s current reputation could hinder the growth of digital insurance as most respondents expressed reservations in providing data to insurers,” said Dr Michael Neary, director and general manager of Insurance, DXC Technology Australia & New Zealand. “Only 49 percent of respondents trust insurance companies to hold their personal information securely, while 47 percent trust that their personal information will be used solely for the intended purpose. This reinforces how experiences that are shared and amplified in an interconnected world can challenge the perceptions of the insurance industry.”
One-third of respondents identified digital claims processing as a technology factor that would improve their loyalty, and 40 percent felt their insurer needed to use technology to improve claims handling. Further, two-in-five or 40 percent are comfortable using chat bots to make claims or apply for insurance.
A significant proportion (47 percent) of Australians would be comfortable downloading and using an app from an insurer. Expectations for usability are high, with almost half (49 percent) of those surveyed expecting that using the app would be as easy as using Facebook or Instagram.
Comfort levels with insurers having access to other personal information was significantly lower, and lowest when the data was related to lifestyle, from sources such as social media, smart home data and shopping records. However, the research shows nearly half (48 percent) of consumers would provide additional personal and lifestyle information in exchange for lower premiums.
Commenting on the study findings, Prue Willsford, chief executive officer, ANZIIF, said, “I was struck by the findings from the DXC survey that demonstrated the disconnect between customer perceptions of the insurance industry and their own experience. The majority of people felt that successful claim rates were 60 percent or less, not the 95 percent we know it to be. Given the findings that 67 percent of respondents would not recommend a role in the insurance industry, there is clearly a need to step back from the challenges upon us and shift this perception by acknowledging the achievements and accomplishments we do every day.”
DXC’s Neary commented further: “Australian insurers are facing a perfect storm of profitability pressure, customer demand for digital services, increasing regulatory oversight, industry consolidation, reputational rebuild, and the potential of competition from data- and digital-savvy companies. Addressing these competing priorities requires a clear road map for digital transformation and an ecosystem of supporting platforms and partners. With most people willing to engage digitally with their insurer, and around a third who prefer it over human interaction, we are confident that the time for digital insurance is now.”
DXC has recently opened Digital Transformation Centres and pop-up Applied Innovation Hubs to help insurers accelerate their digital aspirations.
Download a full copy of “Data and trust: How Australia’s insurance industry can use digital to improve perceptions and loyalty.”
About DXC Technology
DXC Technology, the world’s leading independent, end-to-end IT services company, manages and modernises mission-critical systems, integrating them with new digital solutions to produce better business outcomes. The company’s global reach and talent, innovation platforms, technology independence and extensive partner network enable more than 6,000 private- and public-sector clients in 70 countries to thrive on change. For more information, visit www.dxc.technology.
About Telsyte
Telsyte is Australia’s leading emerging-technology analyst firm. Telsyte analysts deliver market research, insights and advisory into enterprise and consumer technologies. Telsyte is an independent business unit of DXC Technology. Visit www.telsyte.com.au for more information.
For further information, contact:
- Foad Fadaghi, managing director, Telsyte ffadaghi@telsyte.com.au, +61 2 9235 5851
- Sheila Dhillon, director, Corporate Communications, DXC Technology sdhillon@dxc.com