Over three quarters of re/insurers remain digital laggards

ACORD has released its 2022 Insurance Digital Maturity Study of the world’s 200 largest insurance carriers. It has found that fewer than 25% have truly digitised the value chain, while more than 10% are not appreciably leveraging digital technologies within their current business processes.

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.  

“The global pandemic amplified existing market forces, accelerating transformation that was already underway at forward-thinking organisations,” said Bill Pieroni, President & CEO of ACORD.

“The industry saw changes in ten months that may have otherwise taken ten years. The gap between those who have been prioritising digitisation, and those who have systematically underinvested, is now impossible to ignore.”

Winners and losers

The study found that companies that embrace digitisation to create new, technology-enabled operating models throughout the organisation significantly outperformed others in the industry, driving improved value creation.

The findings include an unambiguous correlation between digital maturity and increased financial performance, as measured by both Total Shareholder Return and Indexed Relative Profit.

The study also found that the performance gap between highly digitised insurers and laggards has continued to grow year-over-year, accelerated by the global pandemic.  

“Having seen the pandemic accelerate our customers’ digital journeys, we believe the industry is in the midst of a profound change,” said Microsoft Insurance Industry executive Jonathan Silverman.

“Given today’s challenges, the need to improve industry processes, and the desire to provide more valuable experiences for both employees and customers, we find this study to be very timely. We are excited to help make its insights available to our customers and the broader industry.”

The study highlights that a well-managed business model, supported by robust digital capabilities, afforded top-tier digitized competitors with the ability to outperform the industry. 

“Strategic intent is meaningless without accompanying resource allocation,” Pieroni added. “Insurers must not only embrace the digitisation imperative – they must devote the critical mass of time, talent, and budget to digital investment.

”Aligning technology, process, organisation, and strategy is a prerequisite for high performance in the industry moving forward.”