The results of an important new Accenture survey of insurers across Europe are now in, and they highly significant for insurers everywhere. I’d like to explore some of the conclusions in my next few blogs.
The headline result for me is that insurers across the board have bought into the concept of digital transformation, and are putting serious money into it. Seventy-eight percent of respondents expect their companies to invest more in this area over the next three years.
These investments in digital strategy are indeed substantial: €51 million ($69 million) over three years for multi-line insurers, €30 million ($40.6 billion) for P&C insurers and €21 million ($28.4 billion) for life insurers. This compares to the €16 million insurers plan to spend on claims over the next three years (read our recent claims survey for Europe, Africa and Latin America for more).
Big numbers indeed. They are driven, of course, by what is a very sound business case for insurers: there is a big prize at stake. On the revenue side, insurers expect new premium income from digital channels to more than double between 2012 and 2016, rising from €12 billion ($16.2 billion) to approximately €25 billion ($33.8 billion).
That’s a staggering 110.5 percent growth!
Substantial new revenue opportunities are complemented by potentially large cost savings enabled by digitization of business processes and straight-through processing. In addition, the costs of acquiring customers will also be reduced by the use of analytics and improved customer intimacy, both enabled by digitization.
Of course first movers and truly digital insurers will be uniquely well positioned to provide what the new generation of customers wants—faster than competitors. And what this new breed of insurance customers wants is, in brief, a personalized, meaningful experience across multiple channels; today’s customers also want to deal with a provider they can trust. These hugely raised expectations are mostly being set outside of the insurance industry, but insurers will have to live up to them. In fact, as we will see in the next blog, some of the companies responsible for raising customer expectations are entering or will soon enter the insurance market.