COVID-19 accelerates insurance digitalization; a growing opportunity for insurtechs

Insurers must explore new ways to build capabilities to meet the digital needs of customers as BigTechs  and non-traditional players enter the insurance space, according to the World InsurTech Report 2020 (WITR) published by Capgemini and Efma.

With COVID-19 increasing customer engagement and expectations, the World InsurTech Report 2020 outlines a growing opportunity for insurtechs, as insurers focus on their digitalization efforts. As bigtechs make their presence felt in insurance, the boundaries between insurance, insurtechs, bigtechs, and tech partners are blurring. Insurers need to improve on high-impact focus areas including customer centricity, intelligent processes, product agility and an open ecosystem to remain competitive.

COVID-19 impacted sub-sectors of the insurance market in different ways as life and health experienced a hike in claims, while travel and auto felt a decline, the report notes. However, all insurance providers have felt changes in how their customers engaged with them. Even with over 90 percent of incumbents fully able now to conduct business remotely, they felt the COVID-19 impact on their new customer acquisition and retention. Some 61 percent of insurers in July vs. 57 percent in April believed COVID-19 impacted new customer acquisition, and 42 percent of insurers in July vs. 29 percent in April believed it impacted customer retention.

“Insurers have to look beyond other insurance companies as their competitors, and instead include bigtechs and other new non-traditional players, which are often offering a superior customer experience,” said Anirban Bose, CEO of Capgemini’s Financial Services Strategic Business Unit and Member of the Group Executive Board. “Forming scalable relationships with insurtechs will help insurers digitize faster and more efficiently, deepening their customer relationships and helping them to fend off these new entrants.”

John Berry, CEO of Efma, added: “Insurers need to become more customer-centric in everything they do. Insurtechs’ maturity and willingness to collaborate to bring new technology solutions to insurers are accelerating, aiding insurers to meet rising customer expectations.”