It’s pretty safe to say no-one can undermine the potential presented by digitalization when it comes to business, and the insurance industry is among the sectors banking on the digital promise. However, a reality check suggests insurers are failing in terms of their digital initiatives.
According to the
Global Pricing and Sales Study 2017, by strategy consultancy Simon-Kucher & Partners, 65% of insurance firms were unable to achieve any measurable impact on their revenues amid efforts to go digital. Even the mere streamlining of the sales process is not being realized.
“Companies invest heavily, but still don’t reap any rewards,” noted Dr Dirk Schmidt-Gallas, senior partner and global head of insurance at Simon-Kucher. “Better planned and implemented digitalization initiatives are urgently needed to tap into the potential.”
As to why companies are not enjoying the benefits, even with 87% of surveyed insurers saying they have a digitalization roadmap, Schmidt-Gallas explained: “This is because major uncertainty remains about which measures are really needed and will lead them to success. In addition, the current initiatives are often poorly designed and executed.”
Simon-Kucher & Partners noted that improving the customer journey, redesigning or transforming business models, and digitalizing sales processes were the top three measures cited by companies as growth drivers. However, only about 50% of insurers mentioned these – signifying the lack of clarity within the industry, given the high variance in responses.
“At the end of every customer journey you will find sales,” added Schmidt-Gallas. “Digitalization is an opportunity for insurance companies, but they need to focus on selecting the right measures, and consistently implement them.”
For the study, nearly 2,000 firms from a wide range of industries in more than 40 countries were asked about their pricing and digitalization strategies.
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