General insurers are taking too long to develop products and communication methods suited to the digital world, and risk having their markets eroded by tech-savvy new entrants, according to PricewaterhouseCoopers (PWC).

“Businesses with digital at their heart are quick to respond and adapt, but few insurers are up to speed and many face the risk of being marginalised,” it says in a new report.

Insurers’ understanding of customers lags that of internet and telco businesses and is hindered by limited distribution channel integration and “lengthy form filling” in key areas.

“These shortcomings are opening the door to more customer-centric competitors, including the data-rich and tech-enabled entrants that see non-life insurance as a vulnerable sector ripe for targeting.”

The report – called The Digital Prize: Taking Customer Connection to a New Level – includes results from a survey of 9281 consumers in Europe, North America, Brazil, Singapore, China, Hong Kong, India and South Africa.

It includes brokers, reinsurers, service partners and policyholders in its discussion of insurance company customers.

PWC says most insurers are focused on e-commerce in which they digitally continue previous ways of doing business, instead of driving more far-reaching changes.

About 68% of consumers are willing to download and use apps from insurance providers, and 67% would have sensors attached to their cars or homes if it could cut premiums.

Half are prepared to give additional personal and lifestyle information to gain the best deal.

While insurers are comfortable using complex data in actuarial and underwriting evaluations, they are less equipped to do so in areas such as product design and new business development.

“The best place to test an idea is when it’s in the marketplace,” the report says. “Rather than the quality of initial design, the ability to interpret and respond to customer feedback becomes the core differentiating capability of a digital insurer.”