Article Synopsis :
Digital bancassurance is at the leading edge of the insurtech revolution. Though its breakthrough is anticipated any time from the present moment to within the next 12 months in South East Asia, (see our article here) Europe is trailing many other markets.
Research from German-based broker shows this market is emerging in the eurozone and will become a multi-billion euro market by 2028.
It estimates that in Germany alone, digital commission volumes will grow from around €8 billion in the next five years to €23 billion in 2028 as digital integration offers banks an insurer’s new opportunities to generate additional revenues.
France front runner in digital bancassurance
However, it is the French market that is considered to be the front runner in this market over the coming decade. It will generate €9 billion by 2023 and more than €24 billion by 2028. Though Germany has a larger population, online banking usage rates and per-capita insurance contributions are significantly higher in France.
The southern European states of Italy, Spain and Portugal will trail the others, but by 2028 this market may be worth in excess of €82 billion across all five countries.
It requires the human touch
Robo alone isn’t going to achieve this. Friendsurance sees AI and machine learning as an important component, but one that must support, not replace traditional bancassurance platforms.
The research shows that by 2023, at least 5% of existing contracts will be managed through digital bancassurance solutions. This is expected to rise to 13% by 2028.
The digital experience must make it simpler for customers to sign up for products. Friendsurance anticipates banks and insurers will increasingly adopt modular technologies to avoid having to build systems from the ground up.
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Digital Insurer's CommentsThe impending revolution for bancassurance is tantalising, but much of the narrative focuses on emerging markets.
Of course, the legacy millstone is not so great in these markets, making deployment easier. They have growing populations and rising demand for protection and financial products. Regulators are also keen to see the financial capabilities of their economies developed rapidly while offering maximum protection to consumers.
This paper focuses on the highly developed and heavily regulated (ex-UK) European market.
The level of growth is promising, but the numbers suggest a rather leisurely deployment of digital bancassurance in these markets.
It is true that these markets are not the same as in the UK. Technology may not have made such an impact in the banking and wealth fields, but it is getting there.
Once adopted, there will be no going back and TDI wonders if these numbers will look rather light in just a few years’ time.
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