The Rise of the Digital Insurer

The digitization will proceed the same way as so far – meeting the needs of our market it will still concern insurance distribution. 
Customer behavior is changing. The internet has created new opportunities to access information, communicate, run business and have fun. Common access to mobile devices, especially smartphones and tablets, but also increasingly smaller and more convenient notebooks made the internet tools and resources instantly available.

We live in a world of constant changes driven by technological progress and new ideas that affect our lives. For over 10 years we can track these changes also in the insurance industry. Digital sales channels, known as electronic and internet sales channels, have been present on the Polish market for many years – the first online insurance was offered by STU Hestia in 1997. That’s how it is – the most visible and, of course, the most important activities from a business point of view are sales and after-sales. It is not surprising then that this subject was covered in the newest Sigma published by Swiss Re. People involved in sales will not find anything new there, however, all people dealing with insurance, insurance sales, customer needs and strategic planning should have a look at it. Many will probably answer that it is not of their concern, ensuring that the Polish market is unique, and its customers have their old habits. They may be right, but should not we closely follow global trends and market opportunities?

What do exactly “digital distribution” and “digital insurance” mean? To clarify the concept, we should start from the customer. A digital customer uses electronic channels such as web, mobile and social media to consume shared content, engage with brands and complete transactions. Digital insurance means using electronic channels, sharing content and performing online operations. Insurers often combine this model with traditional business practices, e.g., the process launched with a paper application is continued with the use of an electronic document system, agent-customer relationships are supported by the sales and advisory tools, and communication between the insurance company and the customer is realized via contact center. As it is seen in Gartner reports, most of insurers present on the market make use such mechanisms in a greater or lesser extent. An increase in the use of technological innovations depends mostly on customers’ needs and their openness to contacts with insurers via new channels. However, according to Sigma, market characteristics and new regulations are also highly influential as they impose new challenges for insurance distribution.

Complex and far-reaching process
Without a doubt, digitization of insurance will continue. It will proceed the same way as so far, in a form most suited to the market, i.e. in the insurance distribution area. That is why Swiss Re took up this subject focusing on the improvement of cooperation mechanism and the optimization of operational areas. Digitization and the technological revolution that are currently taking place in the banking sector shows how far-reaching the process can be, and how deep it can influence financial institutions and their customer relationships.


Author: Mariusz Janczewski – Business Development Manager, Comarch SA
This article was published in Dziennik Ubezpieczeniowy No. 3493 of 19th of May 2014.