Standards-setting body, ACORD has released its 2020 Insurance Digital Maturity Study of the world’s top 130 insurance carriers, revealing that less than 30% have “truly digitised the value chain”.
Throughout 2020, insurers have realised the importance of having to evolve and modernise their systems. This is due to the rapidly evolving insurance ecosystem, along with financial uncertainty resulted from COVID-19.
However, this study has shown that there’s still a lot of work to be done in order to create a stable environment for the industry, and this all comes through digitalising.
While fewer than 30% of the 130 largest worldwide insurers have truly digitised the value chain, some 13% are not leveraging digital technologies within their current business processes at all.
More than half of the insurers in the study are currently still exploring how digitisation can be applied against their current business model.
The study assessed each company’s digital maturity relative to its peers; 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 findings provide a clear framework for identifying deficiencies and targeting key improvements.
ACORD Chief Executive Officer (CEO), Bill Pieroni, commented: “The insurance industry is at a critical inflection point, however, there is no other industry better equipped to quickly identify, understand, and mitigate risk. As the industry increasingly understands that failing to digitise 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, subsequently seeing a direct correlation between digital maturity and total shareholder return.
Chris Newman, ACORD’s Managing Director, Global, added: “The pace of digitisation continues to accelerate throughout the industry in the U.S., London, and worldwide. With digital initiatives underway across the insurance ecosystem, stakeholders are finding that they must embrace emerging technologies to stay competitive in the global market.”