What does the current insurance scenario look like in Italy, in terms of digital and social communication? Are the market leaders also the best in class at communicating to their audiences?
Hello! Thanks for your question about the digital and social communication initiatives within the insurance market in Italy. The most useful sources I found to answer your question are the BCG 2015 "Digital Insurance in Italy" report as well as news articles. The short version is that there is a strong focus by insurance companies in Italy to improve both digital and social communication initiatives, as they keep up with consumer tech trends. Below you will find a deep dive of my findings.
The digital and social communication landscape within the insurance market in Italy will be analyzed in 3 parts:
1. Physical Infrastructure – Sensors and telematics are the key to creating multiple touch points in the physical world to facilitate data collection and transmission, and in turn the creation of more appropriate insurance policies for customers based on intelligent data.
2. Tech Trends or Drivers – The increasing dependency on mobile, easy access to information etc. are factors influencing purchasing habits and expectations when buying new products and services, including insurance.
3. Digital Strategy – In accordance with tech trends, how are leading insurance firms are leveraging websites, Internet ads and social media platforms as gateways to creating engagement opportunities with customers?
LAYING THE PHYSICAL INFRASTRUCTURE – SENSORS & TELEMATICS In terms of digital initiatives, according to a report by Thomson Reuters in 2015, the insurance industry as a whole was lagging behind. Yet, Italy has proven otherwise, being one of the most developed markets for the utilization of telematics in the insurance industry, even though its penetration rate was only 3.5% (in February 2015) and considered low. However, this percentage is on rapid ascension and as per Consultancy UK, the penetration rate of telematics within the motor vehicle sector was approaching 10% in the last quarter of 2015, with rates for other segments trending upwards as well. Most recently, the website, Actuary.com, reported that there are more than 4.5 million telematics insurance policies in Italy which accounts for 15% of the motor insurance market. This number is likely to rise to 27% by 2020 given customers’ readiness to share data.
Being a pioneer in the motor business, Italy’s strength in incorporating telematics within its motor insurance business comes as no surprise. However, it is its focus on the next wave of innovation that has gotten insurance market analysts excited.
Matteo Carbone of the Connected Insurance Observatory (an innovative think tank created in Italy by the consultancy firm Bain & Company in collaboration with the Italian National Association of Insurance Companies and 30+ international Insurers) shares the concept of “Connected Insurance”. As per his definition, “Connected Insurance” refers to “insurance solution based on sensors for collecting data on the state of an insured risk & telematics for remote transmission and management of the data collected.”
There are 3 components that make up the concept of connected insurance – Health, Motor and Home.
Andrea Silvello, Founder & Partner at DigitalTech International, shared that since Italy pioneered the work with motor telematics since 2002, it has positioned Italy to be the leading market in connected insurance over US, UK and South Africa. With motor telematics firmly in its pocket, Italy is looking to push the progress in health and home telematics.
As per the website Let’s Talk Payments, major players pushing the developments of connected insurance include The Generali Group (known in Italy as Assicurazioni Generali), PosteVita, OctoTelematics, Consiglio dal Medico, UniplSai, DigitalTech International, Air, Intesa Sanpaolo Assicura, Neosurance, Qmap.
According to the report “Digital Insurance in Italy” by the Boston Consulting Group (BCG), as of October 2014, the state of digital progress in Italy is as follows:
(i) Growing Internet Usage
There are 41 million Internet users. While Internet penetration is at 66% (lower than neighboring countries like Norway), the Internet usage has grown by 6.8% between 2012 and 2014. This could be due to people accessing the Internet from their smartphones or tablets or multiple people sharing a common terminal. In fact, there is a higher rate of Italians at 84% (between 11 and 74 years old) who report that they use the Internet regularly.
(ii) Rapid Smartphone Adoption
There are 95 million active mobile phone subscribers (82.2% penetration rate). Smartphones made up 49.5% of mobile phones in 2014 and this number is projected to rise to 72% in 2018. 15 million Italians access the Internet through their smartphones (compared to 13 million from personal computers and 5 million from tablets).
(iii) Active Participation in Social Media
There are more than 25 million active social media users. And according to Statista, Facebook is the most popular social media platform in Italy, with 36% of the respondents reporting that they use Facebook in 2016. This is followed by Youtube, Google+, Twitter and Instagram.
(iv) E-commerce is growing
According to a study from Politecnico di Milano quoted in the 2015 BCG report, revenue from e-commerce sales totaled about €13 billion in 2014 after growing, on average, 18 percent per year since 2009. An even more accelerated growth pattern applies for purchasing transactions from mobile devices.
HOW DIGITALIZATION AFFECTS THE INSURANCE MARKET IN ITALY
(i) More consumers conduct online search before purchase
According to BCG’s estimates in its 2015 report, the size of the insurance market influenced by the Internet is expected to span from €30 billion to €36 billion. It extrapolates this amount based on one single action facilitated by the Internet and devices – online search.
With quick, easy access to information for comparison afforded by the Internet, there is no doubt customers will research before purchase. In fact, the BCG report also found that insurance customers are getting savvier with information gathering, often researching beyond the insurer’s domains. Between the years of 2008 and 2013, online searches referring to insurance grew by 128%; while online searches with regards to car insurance grew 185% in that same period of time. They also found that for property and casualty insurance, the percentage of customers who research online range between 29% for the former to 56% for the latter (automotive insurance). In addition, the report states that about 50% of buyers of financial products research before purchasing although a more conservative estimate was used for extrapolation. Based these figures, BCG estimates the value of the insurance market affected by the Internet and search:
(a) Property and Casualty Insurance Retail premiums in Italy, 2013 : €28 billion to €30 billion
Purchasers who research online before purchase : 29% - 56%
Total premiums affected by online search : €12 billion to €14 billion
(b) Life Insurance Retail premiums in Italy, 2013
: €79 billion to €81 billion
Purchasers who research online before purchase : 20% - 30%
Total premiums affected by online search : €18 billion to €22 billion
TOTAL PREMIUMS (a+b): €30 billion to €36 billion
This dominance of online search does not show any signs of abatement. The 2015 BCG report quotes a 2012 BCG “Insurance and New Media Consumer Survey” which states that 58% of respondents will visit company websites for future transactions (compared with 18% who did so for past transactions), and 45% will use a Web search engine for search (compared with 9% who did so in the past).
(ii) Consumers are becoming comfortable with online interactions and transactions
BCG also shared in their 2015 report (exhibit 2) that many insurance company customers are already “hybrids”, meaning that they are comfortable with both digital and in-person interactions when dealing with insurance providers with regards to health, protection as well as property and casualty insurance. 15% of customers reported that they are ready to transition to digital-only interactions, which would bring the overall reach of digital channels to almost 70% of insurance customers in terms of their future buying channels. While there is still 30% who prefer only in-person interactions, this number is generally applicable to customers from a low income bracket.
This finding is built upon the BCG 2012 Insurance and New Media Consumer Survey which shows that there is a likelihood of more consumers turning to online platforms for future interactions and transactions. For instance, 43% of respondents met an agent in person for past transactions, but only 40% will do so for future transactions.
(iii) Mobile is the new go-to for information search on insurance
With BCG’s 2015 report, it stated that Google searches across multiple insurance types on smartphones were experiencing rapid growth – car and health insurance (158% CAGR), life insurance (156% CAGR) and home insurance (145% insurance). While it is not explicitly stated that this information pertains to Italy only, this trend is likely to extend to Italy given its consumers’ penchant for mobile phones.
Yet, Italian insurance companies are not catching up to this trend. According to BCG, as of September 2014, only two out of five major insurance groups in Italy had a native mobile site, or m-site. However these m-sites only provided fast quotes and agency locations and not a complete range of services. The remaining three insurance groups presented a smaller version of their desktop website to mobile users, further deteriorating the customer experience.
Unfortunately, findings from the 2014 BCG Global Innovators Survey (in the 2015 BCG report), which collected the opinions of more than 1,500 senior executives worldwide, shows that 40% of insurance managers are conscious of the impending impact of digitalization on their sector but less than 30% are incorporating mobile products into their innovation program. However, there are leading insurance companies in Italy who are taking steps toward customer acquisition (through digital advertising) and providing a more comprehensive customer experience and engagement through online platforms, i.e. websites, social media.
To understand the digital communication initiatives by the leading insurance companies in Italy, I looked at their social media followings as a benchmark, followed by other initiatives to improve customer online experience, for instance, website optimization, mobile app development etc.
All data for social media platforms are as of March 29, 2017. I looked at the popular social media platforms in Italy, namely Facebook, Twitter, Youtube, LinkedIn and lastly Instagram. I also sought to understand the importance of social media to each organization through how it directs traffic to its various social media platforms, for example, whether social media icons are displayed on the homepage of the website.
Given that Facebook is the most popular social media site, Generali can be said to be performing the best with the most number of followers on this platform at 134,306. This is followed by UnipolSai Assicurazioni and Reale Mutua Assicurazioni, although there is a major difference in number of followers between the latter and former. However, Generali and UnipolSai Assicurazioni did not prominently feature social media icons on the homepage of their websites, whereas Reale Mutua Assicurazioni, Allianz Global Assistance in Italia, AXA Italia and Conte.it did.
Twitter ------- 7,681 followers
LinkedIn ----- 98,406
Instagram --- 1,137
** Social media links appear in general Google search for company; icons not on website.
To further improve its digital strategy, Generali awarded the tender to manage social media channels to global media firm, M&C Saatchi in November 2016.
In terms of other digital initiatives, Generali is a customer case study used to demonstrate success by its website vendor, Magnolia. As proudly touted by Magnolia, it boasts that with its technology, Generali “now has a smart, responsive and engaging platform that allows it to offer visitors a seamless experience across multiple screens and devices.” The new site has also been ranked as the best European insurance website by Webranking by Comprend.
In November 2016, Generali also announced in a press release, a partnership with Microsoft designed to "enhance Generali employees, agents and partners’ efficiency, improve operational processes and increase revenues thanks to new insurance products and innovative business models."
Twitter -------- 19,900 Followers
Youtube ------- 2,916 Subscribers
LinkedIn ------- 10,917
Instagram ----- 4,823 Followers
** Only Twitter icon appeared in general Google search for company; icons not on website
Published in July of 2015, UnipolSai Assicurazioni collaborated with IBM to integrate different teams to enable multi-channel engagement with clients.
Twitter --------- 1,121 Followers
Youtube -------- 354 Subscribers
LinkedIn -------- 18,813 Followers
Instagram ------ 393 Followers
** Has social media icons prominently displayed on website
Twitter ----------- 719 Followers
Youtube ---------- 131 Subscribers
No profile found for LinkedIn and Instagram
** Has social media icons prominently displayed on the bottom of their website.
Twitter ------------ 18,700 Followers
Youtube ---------- 567 Subscribers
LinkedIn ---------- 1,522 Followers
Instagram -------- 744 Followers
** Only Twitter icon appeared in general Google search for company; icons not on website
(vi) AXA Italia
Twitter ------------ 8,389 Followers
Youtube ----------- 470 Subscribers
LinkedIn ----------- 14,489 Followers
Instagram --------- No profile.
** Has social media icons prominently displayed on website.
Twitter -------------- No Profiles
Youtube ------------- 117 Subscribers
LinkedIn ------------- 8,682 Followers
Instagram ----------- No Profiles.
** Has social media icons prominently displayed on website
It's important to note that social media numbers will vary constantly, as people Like and Unlike these pages/profiles, and/or Follow and Unfollow these profiles as well.
PROMISING INSURANCE STARTUPS IN ITALY
Italy was represented by 3 promising insurance-related startups at the 2016 IoT Europe Awards. They were Domotz, Innotech Connected Solutions and Neosurance.
Neosurance won in the category of Newcomer IoT, beating 4 other finalists. In essence, Neosurance is a platform that enables other insurance providers to push sales of micro-insurance policies to the right individuals at the right time, based on intelligent data.
Darwinsurance is Italy’s first peer-to-peer insurance platform, which allows each user to group-buy an insurance policy with people they trust, thus “allowing savings up to 40% on premiums if accidents do not occur.”
To wrap it up, Italy has a very vibrant and progressive insurance industry that is continuously improving its digital and social communication initiatives.
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