Most insurance companies in Europe expect demand for digital products and services to increase significantly in response to the global COVID-19 pandemic, according to the results of a new survey released today by Information Services Group (ISG), a leading global technology research and advisory firm.
Eighty-six percent of the European insurance executives surveyed by ISG expect customer behavior to change significantly due to the COVID-19 crisis. And more than 95 percent fully or partially agree that their customers want more digital products and services.
“No customer likes long waiting times, filling out numerous forms and long and confusing contract clauses,” says Johanna von Geyr, partner and co-lead of the EMEA Banking, Financial Services & Insurance industry practice at ISG. “The recent digitization of everyday life—be it working from home or shopping—is also changing the expectations of insurance customers in a significant and lasting way.”
More than nine in 10 of those responding believe the COVID-19 crisis will accelerate digital innovations in the industry.
Meanwhile, 64 percent of the respondents assume the effects of COVID-19 on their businesses will last longer than a year. Another 21 percent expect the effects to last between seven and 12 months.
“The current crisis has left many insurance customers unsettled,” says Bryn Barlow, partner and co-lead of the EMEA Banking, Financial Services & Insurance industry practice at ISG. “As a result, many insurance companies are questioning their long-established business relationships.”
More than 60 percent of those surveyed expect some of their business partners to disappear from the market as a result of the COVID-19 crisis, even as other companies take their place, with the new firms a combination of vendors, insurtechs and IT service providers.
The survey results are detailed in a report, “COVID-19 Pulse Check: State of the EMEA Insurance Industry,” authored by von Geyr and Barlow.
The report notes that some 2,500 insurance start-ups have entered the EMEA market in the last two years, providing innovative solutions that mostly have supplemented the product portfolios and value chains of the established market leaders. About 65 percent of those surveyed see the COVID-19 crisis opening the door to these new market entrants—insurtechs and other online disruptors—to develop new, competing offerings.
European insurance providers believe their competitiveness depends on improved and simplified customer experiences, according to the survey. More than three quarters of those responding rate improve customer experience as important, while more than 74 percent also see automation and digitization as important.
More than 60 percent want to invest in digital customer experience technologies, and more than half want to invest in cloud transformation technologies. Meanwhile, nearly half want to invest in data analytics, machine learning, or artificial intelligence.
In addition, half of those responding rated stability of operations as important. Cost savings, meanwhile, was seen as a priority by only a quarter of those surveyed.
While those surveyed expect major changes because of the COVID-19 crisis, most expect traditional sales channels to remain in place. In Europe, more than half of all insurance policies are currently sold through insurance agents, and about 84 percent of those surveyed believe their companies will continue to sell through multiple channels. Only 16 percent expect a significant push toward direct insurance sales.
As part of its survey, conducted in collaboration with Infosys, ISG interviewed 290 decision-makers with insurance companies from six European countries in late May and early June.
The full report, “COVID-19 Pulse Check: State of the EMEA Insurance Industry,” is available for