Survey participants rely on new customers, cost optimization and outsourcing to address economic pressure points
Sustainability among the five top priorities of European insurers for the first time
Three-quarters of European insurance industry leaders say geopolitical tensions, persistently high inflation and a looming recession will prompt their companies to accelerate digital transformation programs in the coming year, according to a new survey by Information Services Group (ISG) ( Nasdaq: III), a leading global technology research and advisory firm.
The ISG Pulse Check survey, conducted in Q3 2022, included 200 business decision makers and IT professionals in the European insurance industry.
According to the ISG, insurance companies in Europe are facing a “perfect storm” of declining premium income, rising operating costs, emerging competition, increasing climate and cyber risks and a steadily tightening regulatory environment that is forcing them to change their business models at an accelerated rate.
“Insurance companies are aggressively investing in digitally-centric business models to create more growth opportunities,” said Anna Medkouri, ISG Partner, Insurance, EMEA. “According to our survey results, insurers are turning to technology solutions and partnerships in the technology sector to achieve this goal, a trend that is likely to continue for the foreseeable future.”
Acquiring new customers, improving customer retention and optimizing pricing and technology are the top initiatives for insurers, according to the survey. 94 percent of respondents said acquiring new customers is a priority for the next two years, followed by improving customer retention (79 percent), improving customer pricing (78 percent) and developing digital business channels (77 percent).
Another priority for European insurers is to reduce costs and simplify existing infrastructure. 67 percent of those surveyed underlined the urgency of changing outdated systems in the interests of future viability. Many insurers are now decommissioning legacy systems, streamlining application portfolios, heavily streamlining products, and migrating tasks and systems to cloud-based solutions and digital platforms.
Nearly six in 10 respondents (59 percent) were actively seeking vendor consolidation to improve performance, and 74 percent said they wanted to outsource more to increase value, improve agility and reduce costs by focusing outsourcing on primary business processes extended, such as arrangements with third-party insurance, case processing and administration providers.
“Insurers are looking to specialist vendors to help them upgrade outdated technology environments because legacy systems are hampering their ability to compete with disruptive players and cloud-based insurance providers from the start,” Medkouri said. “The next three years will be critical for insurance companies as more technology enters the value chain and customers expect digitally-matured experiences.”
For the first time in this survey series, sustainability was among the top five priorities for insurance companies.
“European insurers are pursuing ESG strategies and mobilizing technology investments and strategic partnerships to mitigate the impact of climate change, enhance their reputation and increase shareholder value,” added Medkouri.
Four out of five insurers said they have plans to leverage the emerging world of the Metaverse and Web 3.0. However, the scope of this investment is expected to be rather small in the coming years.
The ISG study “Pulse Check State of European Insurance Industry 2022” is available for download on this website.
About Information Services Group (ISG)
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. As a trusted business partner to over 800 customers, including more than 75 of the world’s top 100 companies, ISG helps corporations, public organizations, and service and technology providers achieve operational excellence and accelerated growth. The company’s focus is on digital transformation services, including automation, cloud and data analytics, sourcing consulting, managed governance and risk services, network operations services, strategy and operations design, change management, market research and technology research and analysis. Founded in 2006 and based in Stamford (Connecticut/USA), ISG employs over 1,300 digitally savvy experts in more than 20 countries. ISG’s global team is known for innovative thinking, market influence, deep industry and technology expertise, and world-leading market research and analysis capabilities powered by the industry’s most comprehensive market data. Visit www.isg-one.com for more information.
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View original version on businesswire.com: https://www.businesswire.com/news/home/20230111005261/de/
Philipp Jaensch, ISG
+49 151 730 365 76
Matthias Longo, Palmer Hargreaves for the ISG
+49 152 341 464 63