Brief

How insurers can take up the digital challenge

By Dr. Henrik Naujoks, Dr. Gunther Schwarz, Dr. Gero Matouschek and Bodo von Hülsen

First published on septiembre 27, 2013
min read


The digitalization of the financial sector has reached the conservative insurance industry and has meanwhile established itself there as a familiar feature. Most insurance companies can already be accessed online in some form or other and a growing number of insurers can also be found on social networks. Many companies are also switching to apps as a means of simplifying interaction with their customers. Equipping a company's external sales force with mobile devices has also become very popular. Other technologies such as telematics are beginning to make a contribution towards realigning product and price policy, at least in selected European markets. However, as welcome as many of these initiatives might be, they still need to be integrated into an inter-functional and inter-divisional model. They frequently have a reactive character and are not based on an analysis of key customer needs. What is more, the initiatives only rarely breach the traditional boundaries between distribution and communication channels. But precisely this is necessary if justice is to be done to the radically altered customer behaviour in the digital age. The Bain study which interviewed more than 2,500 insurance customers in Germany evidences that, for a good 60 percent of insureds, internet-based communication channels are vital when it comes to interacting with an insurance company. The number of online fans can be seen growing especially in customer segments for which a comprehensive range of services is of great significance. These customers expect an extensive range of digital offers – whether this be in the advisory, contract or claims reporting fields. The customer survey also reveals that customers no longer accept differences between online and offline channels. Thus, online business models are no longer a vehicle for addressing especially price-sensitive customers but have become an integral and especially convenient component of the spectrum of products and services of each insurance company. The "convenience" factor is evolving into a key distinguishing feature in the digital age. Download PDF

The digitalization of the financial sector has reached the conservative insurance industry and has meanwhile established itself there as a familiar feature. Most insurance companies can already be accessed online in some form or other and a growing number of insurers can also be found on social networks. Many companies are also switching to apps as a means of simplifying interaction with their customers. Equipping a company's external sales force with mobile devices has also become very popular. Other technologies such as telematics are beginning to make a contribution towards realigning product and price policy, at least in selected European markets.

However, as welcome as many of these initiatives might be, they still need to be integrated into an inter-functional and inter-divisional model. They frequently have a reactive character and are not based on an analysis of key customer needs. What is more, the initiatives only rarely breach the traditional boundaries between distribution and communication channels. But precisely this is necessary if justice is to be done to the radically altered customer behaviour in the digital age. The Bain study which interviewed more than 2,500 insurance customers in Germany evidences that, for a good 60 percent of insureds, internet-based communication channels are vital when it comes to interacting with an insurance company. The number of online fans can be seen growing especially in customer segments for which a comprehensive range of services is of great significance. These customers expect an extensive range of digital offers – whether this be in the advisory, contract or claims reporting fields. The customer survey also reveals that customers no longer accept differences between online and offline channels. Thus, online business models are no longer a vehicle for addressing especially price-sensitive customers but have become an integral and especially convenient component of the spectrum of products and services of each insurance company. The "convenience" factor is evolving into a key distinguishing feature in the digital age.

Download PDF