In an era where technology makes communication almost instantaneous, Gen Y customers have higher expectations and expressed a greater degree of dissatisfaction with their customer experience. They expect and want to interact more with insurers through digital channels like email, apps and social media rather than interacting on a personal level with claims adjusters and managers.

The most positive customer experience was in the agent channel for customers of all ages and across all regions. In North America, 50% of customers said they had a positive experience with their agents. And again, the use of or lack thereof when it came to digital channels had less than 30% of the customers saying they had a positive experience.

The challenge for insurers is to find a way to blend the intimacy and personal service that agents provide with the technology and access to social media that Millennials and Gen Y customers expect. They can use these channels to "touch" their clients regularly in an effort to "wow" customers through their preferred methods of communication.

For clients who reported a property claim in North America, only 24% said they had a positive experience compared to 47% of customers who did not make a claim at all. According to the study, for customers accustomed to "conducting a wide range of personal activity in streamlined, frictionless internet and mobile transactions, the insurance claims process likely feels inconvenient and cumbersome." This puts even more pressure on insurers to process claims faster with the least amount of inconvenience to the policyholder.

"The claims channel had the lowest positive experience," said Gage. "Insurers are taking steps to improve it, but they have a ways to go. For customers, it is one of the most important moments of truth." Part of this is probably due in part to customer expectations "that have been set beyond most insurers' capabilities."

The study also identified a number of disruptors that will impact insurers and the business of insurance in general.

Demographic changes will affect product pricing and underwriting as policyholders live longer and retire later. The number of teen drivers and single-parent families is also expected to increase. The longevity of an aging population and an increase in younger customers will provide opportunities for insurers to launch new products to serve a diverse range of clients.

The growing frequency of extreme weather events and the rising costs associated with them will also require new insurance products. Insurers will also require better modeling tools and analytics to better manage these events, and there will be a greater dependence on social media to educate and alert customers before, during and after a catastrophe.

There will be new entrants into the insurance space like Google and Amazon, who have little insurance-based experience but are bringing new processes and transparency, as well as increased competition. Initiatives like Google Glass and Google's pursuit of driverless cars will have a major impact on the industry.

Increasing economic uncertainty globally will affect profit margins as well as the products insurers offer.

According to the study, insurers "will feel greater pressure to increase operational efficiencies and reduce the time to market for new products." And as consumers develop new business models and products, insurers will need to be flexible in developing coverage to meet those needs.

Regulatory changes could become burdensome enough that insurers are forced to change existing products or stop offering them altogether. It will be critical for insurers to understand how these changes will affect their insureds in terms of product development and distribution, as well as any new risks they create.

The final disruptor involves technology and the Internet of Things. As technology advances and the availability of information becomes all-encompassing, insurers will have access to data from a wide variety of sources that can be collected and analyzed, giving them a more accurate picture of an insured's risks and exposures. While access to this plethora of information will be invaluable, at the same time it can be overwhelming as insurers seek to translate it into usable data. Privacy issues will also be a concern as evidenced by the series of recent and massive data breaches.

Technological advances have created an expectation of instant gratification where users can immediately access dozens of friends via social media, purchase items online at the click of a button and get information in seconds. These expectations carryover into how insureds view the information and services they receive from their insurers, requiring online or mobile payment options for policy renewals, faster claims processing through options like photo and video uploads, and communication via social networking and specialized apps.

Gage says that insurers will need to differentiate themselves based on an industrialized set of core systems.

"It's important for insurers to assess their ability to differentiate themselves. Do they have the core systems that will allow them to market products that will differentiate them from other companies?"  

In essence, insurers will need to completely revamp their processes from the customer's perspective to meet these rising service expectations.