Digital pulse check insurance 2019

Europe’s insurers have gradually driven forward the digital transformation of their business models over the past few years and have thus become more digital overall. Bigger leaps in innovation, however, can neither be perceived in the product range, nor in processes or technology. Customers show an appetite for digital insurance solutions, but insurers’ offerings remain limited to basic digital services so far. The transformation has not yet reached the customer.

These are key results of the latest Insurance Digital Pulse Check by zeb. After its first study on the topic, the strategy and management consultancy has again investigated the status of digitalization in selected European insurance markets and surveyed 100 industry experts and executives as well as 5,000 end customers in Germany, Austria, the United Kingdom, Italy and Switzerland.

Stefan Geipel, Partner at zeb and initiator of the study, explained: "Our current digital pulse check shows that the insurers’ approach to digital transformation tends to be event-driven. They gradually add new digital products and services to their existing business models. While digital agendas are set and initiatives are defined largely strategically, only a small minority use digital targets, such as online sales and automated processing ratios, as KPIs for management. Customer satisfaction is also rarely integrated as a key KPI. Therefore, digital strategies still lack consequence.”

Insurers not yet ready for broad channel use

The majority of surveyed customers continue to prefer personal contact. Especially when taking out insurance policies or reporting complex claims, people still turn to their personal advisor. Online channels, however, are now almost as popular. At the same time, there is still room for improvement in insurers’ omni-channel offerings. For example, a third of the insurers surveyed have not established centralized management and content integration of sales channels and the majority still do not offer their customers frictionless channel switching or only do so for selected pilot processes.

Interaction rates remain low—ecosystems are not a “miracle cure”

Although the online channel is becoming more and more important, the overall frequency of online interactions between customers and insurers remains low. Two thirds of surveyed end customers use their insurers’ websites or apps once a year at most, but tend to view these in a positive light. Ecosystems, i.e. a network of own and third-party products and services offered on platforms, will only cure this problem to a certain extent. While more than half of all insurers say they are working on initiatives related to integrating products and services into their own or third-party ecosystems, half of all customers surveyed cannot imagine buying non-insurance services via insurance platforms for now. On the other hand, customers appear to be highly interested in digital insurance products and services, although insurers usually only offer basic solutions. A systematic offering of value-adding digital services directly related to insurance, such as digital assistance services, thus remains an important “basis” within the core competencies of insurance companies.

Analytics and AI still offer untapped opportunities

Insurers have recognized the hidden potential of (customer) data for leveraging revenue and cost saving opportunities and integrated it into their corporate strategies. The majority of surveyed insurers have already laid the necessary technical foundations in data management and data warehousing for data analytics’ areas of application. From the perspective of the study authors it is therefore all the more baffling that most insurers do not leverage this (customer) data in their sales efforts because they fail to consolidate and provide it across all company and sales units. Relevant use cases need to be identified, assessed and put into implementation in iterative cycles.

Milena Rottensteiner, Senior Consultant at zeb and co-author of the study, commented: “Half of all insurers do not even implement AI approaches in pilot projects, even though the untapped potential of (customer) data becomes especially obvious when looking at the low level of automation at the customer interface. Automated, data-driven decisions occur in only a few selected areas of a company, if at all. The end-to-end automation of all basic processes is still a future scenario.”

Overall, customers are fairly indifferent with regard to the current insurance experience, but at the same time they have an appetite for value-adding digital insurance solutions. Insurers still have the opportunity to differentiate themselves from the competition by building their digital product and service offering faster and more systematically. When doing so, it is crucial not to skip the step of optimizing and integrating existing channels and enabling automated, data-driven decisions at the customer interface. Insurers need to become more digital in their core business.

For further information on the Insurance Digital Pulse Check by zeb please refer to the link

About zeb

zeb was founded in 1992 and is one of the leading strategy and management consultancies for financial services in Europe. In Germany, zeb operates offices in Frankfurt, Berlin, Hamburg, Munich and Münster (HQ). Its international locations are in Amsterdam, Copenhagen, Kiev, London, Luxembourg, Milan, Moscow, New York City, Oslo, Stockholm, Vienna, Warsaw and Zurich. Its clients include European large-cap and private banks, regional banks, insurers as well as all kinds of financial intermediaries. Several times already, zeb has been classed and acknowledged as “best consultancy” for the financial sector in industry Rankings.

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