Insurers understand the need for digital innovation – many have had digital transformation strategies in place for several years. But since the coronavirus pandemic, the race to digital has been more urgent. With fewer personal channels, insurers are facing the need to make faster and more effective innovation investments to deliver digital experiences that meet consumers' rising expectations. With a prolonged economic downturn on the horizon, insurers must find ways to reduce costs and improve efficiency. In this series I will look at what this means for European insurance companies.
As analyzed in Accenture's recently published Digital Innovation Payback Report, insurance companies worldwide are investing in digital innovation as they strive to keep operating costs, improving customer engagement. and reinvent their business. While our analysis of innovations from insurance companies and financial measures shows a deviation from region to region, it seems that customer-oriented innovation is crucial.
Where is the repayment of digital insurance in insurance for the European market? We looked at the innovations of the following leading insurance companies in European countries.
In Europe, insurance companies continue to benefit from distribution innovation. The Zurich Spain Alliance, for example, is actively seeking additional distribution channels as part of its innovation strategy.
This distribution focus reflects our research in other regions, which shows that market conditions and innovation strategies differ across different parts of the world, but distribution almost always appears at the top. Why? As customer experience and distribution innovations expand the market's reach, streamline customer-oriented and internal workflows, reduce overall costs and increase growth.
Although there is a continuing advantage of innovation in distribution for European markets, the correlation with higher performance is weaker than in other markets. Europe is also the only market where customer experience does not show a positive return, and investments in internal efficiencies show only a small positive correlation with higher performance. This can be explained by the fragmented distribution and tax system across countries.
Although distribution may be slow to generate returns for European insurance companies, they must persist. Distribution is a battlefield for insurance companies, which will only continue to intensify in 2021. Non-traditional players also participate in the competition for customers with distribution innovations that are more convenient for them. Accenture's consumer survey 2021 shows that consumers explore different insurance providers based on their unique needs.
Although we may be at a stage where the repayment of digital innovation seems less in relation to the efforts and resources required to invest in innovation, European insurance companies must not be mistaken. Digital value insurance will continue to show exponential returns over time, as established players use this shift in focus to concentrate on what really matters to their customers. If they stop now, the market share will decrease and increasingly discerning customers will become more difficult to reach.
Disclaimer: This content is provided for general information only and is not intended to be used in consultation with our professional advisors.