Property and casualty (P&C) and life insurance polices volume sold online could reach about 3.4 billion in 2016, up from 1.6 billion in 2012, in Europe, according to a study by Accenture, based in London.
About 78% of European insurers are planning to increase investments for digital sales and distribution functions, with an expected 3.6 million to spend on average over the next three years.
Currently, 60% of European insurers confess to not having a digital strategy in place or only having a limited strategy for sales or customer interaction processes. Areas that do not have a digital strategy include product creation, underwriting to claims settlement and policy administration.
The biggest challenge cited by 85% of respondents was managing change across physical channels. The next significant barriers are the constraints of IT legacy systems and inability of the organization to act quickly, says 81% of respondents.
“The transformation is critical to attract consumers who are becoming increasingly unwilling to buy a product or service that does not provide the same levels of convenience, simplicity and speed to which they have become accustomed from many other services they use everyday,” says Piercarlo Gera, global managing director of Accenture Distribution and Marketing Services.
About nine out of ten respondents expect competition to intensify in the insurance distribution market over the next three years. About 64% feel that the competition will come from non-insurance players like Google or Amazon.
“The threat posed by emerging competitors such as Internet giants is real because user-experience improvement is part of these companies’ DNA, and this is a strategic weapon in gaining market share in the insurance distribution business,“ states Jean-Francois Gasc, managing director of Accenture Distribution and Marketing Services for insurance across Europe, Africa and Latin America.
Gasc adds, “to maximize value from digital, insurers will need to move from product-centric culture to customer-oriented mentality.”
[Read: Distribution Disruption Defies Insurers, Agents to learn more.]
Over the next three years, 67% of insurers mentioned developing mobile devices for new customer interaction channels for sales, customer services or marketing, while 59% are considering social media.
About 53% of respondents plan to invest in big data management capabilities, 40% in unstructured data management like voice and video and 36% on mobile technology.
The survey has included 78 European C-level executives involved in digital distribution strategies, as well as heads of sales and CMOs at P&C and life insurance companies. Companies from France, Italy, Spain Germany, U.K., Belgium, Austria, Netherlands, Sweden, Switzerland, Finland, Norway and Denmark participated.