Fewer than 30% of the world’s biggest insurers have made any real progress in driving digitalisation int the value chain accord to global standards body ACORD.
The organisation published its latest Digital Maturity Study of the world’s top 130 insurance carriers and found the COVID pandemic has added greater impetus for the need for the industry to better embrace the use of technology.
It stated: “A rapidly evolving insurance ecosystem, paired with financial uncertainty amid a global pandemic, have led to a need for insurers to modernise that is more urgent than ever. Yet the ACORD study indicates that much work remains to be done.”
Among the 130 largest worldwide insurers, fewer than 30% have truly digitised the value chain while 13% are not leveraging digital technologies within their current business processes. Over than half of the insurers in the study are still exploring how digitisation can be applied against their business model.
The ACORD 2020 Insurance Digital Maturity Study is the fourth edition of its annual study and assessed each company’s digital maturity relative to its peers. It compared the extent of digital capabilities with the level of value creation; and identified the issues, implications, and most importantly, execution imperatives around successful digitisation.
“The insurance industry is at a critical inflection point,” said ACORD CEO Bill Pieroni. “However, there is no other industry better equipped to quickly identify, understand, and mitigate risk. As the industry increasingly understands that failing to digitize is a known risk, and that the benefits are material, insurers will place increasing value on its importance.”
The study found that companies embracing digitisation to develop new, technology-enabled operating models throughout the enterprise significantly outperformed the industry and saw a direct correlation between digital maturity and total shareholder return.
“The pace of digitisation continues to accelerate throughout the industry in the US, London, and worldwide,” said Chris Newman, ACORD’s Managing Director – Global. “With digital initiatives underway across the insurance ecosystem, stakeholders are finding that they must embrace emerging technologies to stay competitive in the global market.”