|[October 14, 2013]
Insurance Sold Through Digital Channels to Reach €25 Billion Annually in Europe, According to Accenture Study
LONDON --(Business Wire)--
The total annual volume of property and casualty (P&C) and life
insurance policies sold through digital channels in Europe could reach
€25 billion in 2016, more than double the 2012 value of €12 billion,
according to a new Accenture (News - Alert) (NYSE:ACN) study based on a survey of 78
insurers across Europe.
According to the study, policies sold through digital channels are
expected to account for 18 percent of European insurers' total annual
new business premium volume in 2016, compared to 11 percent in 2013.
The study also finds that three-quarters (78 percent) of European
insurers are planning to increase investments in the digital
transformation of their sales and distribution functions, and expect to
spend €27 million, on average, in this space over the next three years.
"The shift to digital is inevitable for insurers and our study reveals
that the industry is investing heavily to transform itself," said
Piercarlo Gera, global managing director of Accenture Distribution and
Marketing Services. "This 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 every day. Especially, the "digital generation", or Generation
D, which is permanently connected and used to purchasing books,
electronic devices, music and travel online. Insurers must invest in
capabilities with a clear strategy to improve the overall customer
experience with every interaction."
The complexities of managing changes across physical channels is
perceived by insurers in Europe as the most important challenge in the
digital transformation of their distribution, cited by 85 percent of
respondents. Other significant barriers include the constraints of their
IT legacy systems (81 percent) and the inability of their organization
to act quickly (81 percent).
The study also indicates that nine European insurers out of ten (89
percent) are expecting competition to intensify in the insurance
distribution market over the next three years. Almost two-thirds (64
percent) believe that this competition will come from non-insurance
players, such as Google (News - Alert), or e-commerce giants like Amazon.
"Insurers realize that the digital journey is full of pitfalls, with
challenges in overcoming internal resistance to change, and emerging
external threats," said Jean-Francois Gasc, managing director of
Accenture Distribution and Marketing Service for insurance across
Europe, Africa and Latin America. "To maximize value from digital,
insurers will need to move from a product-centric culture to a
customer-oriented mentality. 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."
Among other survey findings:
Sixty percent of European insurers confess that they currently do not
have a digital strategy in place or that their strategy is limited to
only a few areas - such as sales or customer interactions processes -
and fails to cover the entire insurance value chain, from product
creation and underwriting to claims settlement, including policy
The top priority for European insurers in their digital transformation
strategy is to obtain a 360-degree customer view across all channels,
mentioned by 59 percent of respondents. Other top priorities include
streamlining processes (57 percent), and increased customer
self-service functionalities (56 percent).
When asked which new customer interaction channels - whether for
sales, customer service or marketing purposes - they are considering
developing in the next three years, two-thirds (67 percent) of the
European insurers surveyed mentioned mobile devices, followed by
social media (59 percent).
Over the next three years, insurers plan to invest in "big data
management capabilities" (53 percent), in "unstructured data
management" such as voice and video (40 percent), and mobile
technology (36 percent).
Regarding their back-office functions, insurers' top investment
priorities are "collaboration and social networking tools" (40
percent) and "Web-enabled reporting and data-mining" (36 percent).
"Digital is more than simply a new distribution channel," said
Jean-Francois Gasc. "The digital era offers an entirely new way of doing
business, affecting all strategic and functional areas across the entire
insurance value chain. It presents opportunities for improved brand
management and social media engagement; seamless multi-channel sales and
service across phone, online and new channels such as mobile and social
media; a collaborative 'digital workforce' culture, harnessing
techniques such as crowd-sourcing; and products and services that can be
developed, marketed, distributed and underwritten in entirely new ways,
underpinned by powerful analytics and personalization techniques."
Accenture commissioned a survey of 78 European P&C and life insurers.
The 78 respondents were C-level executives involved in digital
distribution strategy, including heads of sales and chief marketing
officers. Interviews were conducted by telephone by Kadence Ltd. and in
person by Accenture executives, between April 2013 and July 2013. Of the
companies represented, 25 percent had net premiums written (NPW) of more
than €10 billion; 57 percent had NPW of €1 billion to €10 billion, and
18 percent had NPW of below €1 billion. Of the 78 insurers, fifteen were
located in France, twelve in Italy, eleven in Spain, eight in Germany,
seven in the United Kingdom, six in Belgium, five in Austria, three each
in the Netherlands, Sweden and Switzerland, two each in Finland and
Norway, and one in Denmark.
Accenture is a global management consulting, technology services and
outsourcing company, with approximately 275,000 people serving clients
in more than 120 countries. Combining unparalleled experience,
comprehensive capabilities across all industries and business functions,
and extensive research on the world's most successful companies,
Accenture collaborates with clients to help them become high-performance
businesses and governments. The company generated net revenues of
US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page
Accenture helps financial institutions transform their customer
relationships through Accenture Distribution and Marketing Services, a
business service within Accenture's financial services operating group,
serving more than 100 institutions worldwide. Accenture Distribution and
Marketing Services combines Accenture's deep industry knowledge in
banking, insurance and wealth management with proven expertise in
marketing, distribution and innovation. It blends Accenture's management
consulting, technology and outsourcing capabilities - including its
assets and expertise in digital innovations, like analytics and mobile -
to help institutions improve growth and cost management through better
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