A new study by EPAM with 900+ people in Switzerland, Austria and Germany reveals that consumers may be ready for Web3, metaverse and emerging technologies – and suggest it’s insurers who need to catch up.
Previously, EPAM carried out real-world studies of consumers in Switzerland and Germany, exploring their insurance buying experiences. Insurance: The Digital Paradox series revealed a significant gap between the digital insurance journey expectations of insurers and consumers.
- Consumers were generally unhappy with the user experience offered by insurance websites.
- The satisfaction with chatbots was low as they were perceived as inadequate and did not provide sufficient information.
- Too often, users needed to contact an agent to complete purchases.
- Completing the insurance purchasing journey took too long.
- User groups were polarized:
- Millennials and Gen Z, the most tech savvy group, were willing to share data to get more personalized services and better pricing, but the least insurance literate.
- Baby boomers and Gen X were the most insurance literate, but the least likely to share their data in exchange for better service.
For the industry as a whole, the message was clear: insurance companies continue to struggle to get human-centricity to translate into meaningful customer experiences right.
In our new research; however, a clear shift is evident.
Online insurance: consumers attitudes towards insurance digital services are changing
Our latest research, combining our previous work in this domain, 900+ surveys across Switzerland, Germany and Austria into baby boomers, Gen X, millennials and Gen Z consumers with different incomes and education levels, found that online now is the most preferred channel for buying insurance and interacting with insurance companies, and…
- 52% of 20–25-year-olds
- 61% of 26–41-year-olds
- 59% of 42–56-year-olds
- 51% of 57+ year-olds
…say satisfaction with digital channels are high and improving (68%).
Yet as online/digital continues to evolve, with the increasing influence of Web3 and the metaverse, can we expect that growing satisfaction to continue?
Web3, the metaverse and DeFi
If Web 1.0 can be summarised as ‘read’ and Web 2.0 has been ‘read and write.’ Web3 is a new generation of the internet inspired by blockchain technology where decentralized processes and decision making will usher in a new era of ‘read, write and own.’ In the decentralized Web3 world, consumers control their own data and interact directly with peers.
The metaverse, the internet in 3D, where people can shop, work, play and socialize, is a simulated digital environment made possible by Web3. As of March 2022, the metaverse had 400 million active users, with around 25% of all adults are expected to spend one hour or more each day in the metaverse by 2027.
For insurers, the final building blocks in this next-gen puzzle are smart contracts (that is, automated, self-executing contracts) and DeFi (decentralized financial services), such as payments, lending and exchanges that are provided using smart contracts without relying on centralized intermediaries, such as banks.
Consumers more ready for the metaverse than insurers?
You might imagine consumers will need coaxing into this new world, that the metaverse is too abstract a concept to truly engage, and DeFi, like the fusion reactor of the finance world, remains a tantalizing prospect that is years away.
Our study suggests you’d be wrong.
- 69% of those surveyed had some level of knowledge about the metaverse
- 43% said they were likely to use the metaverse to experience simulated insurance scenarios
- 75% said they wanted digital asset insurance – and given recent events in the cryptocurrency world, you might expect that figure to be soft
It’s not me, it’s you
Perhaps most surprisingly, 42% of consumers felt the insurance sector wasn’t ready for Web3. This compares with just 37% who thought it was.
In fact, every customer age group is majority positive (or at worst neutral) about the idea of buying insurance from companies running Web3.
- 52% of 20–25-year-olds
- 60% of 26–41-year-olds
- 59% of 42–56-year-olds
- 53% of 57+ year-olds
Conclusion
Web3 and the metaverse have the power to bridge the offline and online gap, with virtual human interactions supporting those user groups (especially boomers and Gen X) who value in person support. All the issues that drove dissatisfaction in our previous studies have a potential fix throughWeb3 and the metaverse in 2023 and beyond.
The challenge appears to be as much about convincing consumers that the insurance industry is ready as it is about convincing consumers to choose Web3 products.
So how should the industry respond?
Our latest report, with recommendations for the insurance sector’s next steps, will go live soon. To be among the first to read, register now.
