
Why European Insurance Firms Prefer Customer-Centric Business Model
European insurance firms are focusing on offering more customer-centric policies and create high relevancy for long-term business benefits.
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CIO Applications Europe | Tuesday, February 04, 2020

European insurance firms are focusing on offering more customer-centric policies and create high relevancy for long-term business benefits.
FREMONT, CA: Life insurance professionals realise the need for developing strategies to tackle the Euro-zone crises. Although life insurance is a foundation of the European savings and retirement ecosystem, this sector is undergoing an economic slowdown from the past few years. Almost two decades of low-interest rates have significantly affected the profits of the industry. Further, the value proposition of life insurance is tough without attractive guarantee levels and healthy investment returns.
The demand for long-term savings is increasing among the mass, thereby catching a toll on life insurance investments. The prime motivation for such a trend is that individuals have a longer lifetime. The mortality rate is continuously falling, with life expectancy remains to rise. According to a report, 70-year-olds will be almost 40 percent more likely to live than their counterparts in the year 1983. Moreover, an additional burden on European states is influencing the governments to reduce pensions, causing the people to find alternative sources of investments where life insurance takes a back seat.
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Changing customer expectations and needs encourage the insurers to adapt their business proposals accordingly. However, resetting the distribution needs massive change for insurers. The insurers need an increased agility and balance speed to succeed in case of a transformation. Deployment of technology-based solutions can significantly assist in the before-mentioned transitions.
European insurers need to respond to customer expectations and requirements around personalisation and relevance. One way to improve flexibility is to bundle insurance products across the verticals of health, retirement, and wealth management systems. Insurers can also develop a product that enables the customers to adjust premiums flow into various types of protection as they grow older. Such flexibility of being able to adjust premiums will enhance personalisation as well as increase customer engagement. Insurers can also improve relevancy by allowing some downside protection for retirement solutions such as via hybrid products that combine unit-linked products to a guarantee of around 80-85 percent of the invested capital.
The European life insurance industry can heighten its value proposition by adapting technologies according to the modern age customer expectations.
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