Avenga : Digital insurance: Opportunities and challenges for insurance companies in the digital world
Executive summary :
For a long time, insurance companies were not taking advantage of the opportunities offered by digitisation.
This, however, has massively changed in recent years. Just as in retail or banking, digital transformation is rapidly altering the rules of the game in the insurance industry.
This report outlines step by step how to utilise the potential of digitisation for insurance companies.
Digital insurance reduces costs
Most insurers have long since recognised the necessary change towards a digital future: Taking out new policies and managing existing ones, comparing dental offers, submitting bills and reporting a car accident – all these can now be done online.
There are two reasons for this: Costs and customers.
“We have to reduce further costs. In this respect, there is inevitably pressure in the industry to continually improve efficiency,” explained the former President of the German Insurance Association (GDV), Alexander Erdland, to the Handelsblatt as early as 2017. He also knows how cost-cutting should work: “For this, we need more employees in new technologies.”
However, the ability to digitally optimise processes and thus reduce costs is by no means the only driver of digitisation in insurance companies.
Customers are driving the digitisation of the insurance industry
To digitise the insurance industry, the changing (and growing) demands of policyholders are, besides pure efficiency, the important second driver of innovation.
As early as 2013, the study “Insurances: The Digital Challenge” by Bain & Company caused some astonishment among the experts: Not only because 40 percent of the insurance customers surveyed said they were willing to switch. But above all, because even then around 60 percent considered that, for the future, web-based communication channels would be the most important means of interacting with insurance companies.
In terms of “customer focus”, this was a wake-up call for the industry. While, prior to this, the majority of the insurance industry had, for decades, been sure of their customer base, this foundation of successful sales began increasingly to waver. Digitising the insurance industry makes it easier for customers to access information, enables simple comparisons between providers, and accelerates closing processes – even with the competition.
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