Life insurers have been warned against ignoring “one of the greatest challenges facing the industry” – higher customer expectations.

Deloitte has warned in a new report, Preparing For The Future, that customers “have higher expectations than ever before”.

“Delivering a highly effective customer experience that meets these expectations will likely require insurers to leverage information management and analytics to better understand both the requirements and internal costs,” it says.

Noting that customers have little tolerance for poor service, invasive underwriting and complex forms, it says improved ability to use technology and data analytics should enable insurers to provide better service, more transparent products and pricing which would lead customers to trusting the company.

“Insurers need to make it easy by giving customers responsive service and the choice of how they want to interact,” the report says.

“They should leverage data analytics to gain insight into a customer’s life events and changing financial needs.”

The report says customers appreciate insurers which make their lives easier.

“Customers now want the ability to find the same information online or call the customer service line and have their detailed questions answered, even if outside of normal business hours.

“They expect to be able to use multiple channels to research and purchase products, access their accounts, ask questions and resolve problems.”

Deloitte says insurers will have to look at upgrading their customer service operations if they are to survive in a very competitive marketplace.

This includes looking at hiring practices, training programs and information management.

“The scale of these challenges is daunting, but other industries have faced similar issues and succeeded,” the report says.

“Insurance companies that can move beyond conventional alternatives to introduce fundamental changes in their organisations have the opportunity to distance themselves from the competition.”