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January 9, 2018

Digitalization – the Great Disappointment

Summary:

Large sums are being invested, but not in a targeted manner. We need to better plan and implement digitalization initiatives.

Photo Courtesy of Pexels

Digitalization? – Let’s do it!

  • 91% of all insurers in our survey said they invested in digitalization initiatives over the last three years.
  • 89% of companies hope digitalization will lead to a considerably more efficient sales process.
  • 87% have developed their own digitalization road maps.
  • The most important sales skills and activities in the future will be digital and mobile sales tools.

See also: The Industry’s New Dynamic Duo  

Digitalization! – Are we doing it right?

  • The digital customer journey and digital sales processes are some of the most important revenue drivers but were only mentioned by around half of the respondents. This means there’s a lack of clear direction on which measures are really required and promising.
  • Only one in four digitalization initiatives boosted revenue.
  • Digital sales processes are ranked No. 1 for growth drivers currently receiving insufficient investment.

Focus on pricing and value? – Houston, we have a problem

  • Price pressure and declining price levels constitute the greatest obstacles to revenue growth.
  • More than third of those interviewed indicated they had realized less than 20% of their planned price increases.
  • Digitalization further increases this trend, according to the participants.
  • Reducing sales variance through well-thought-out sales processes and systematic value selling are regarded as
    useful countermeasures.

See also: 4 Ways That Digital Fuels Growth  

Conclusion: Insurers see great potential in digitalization, especially in sales. Large sums are being invested, but not in a targeted manner. We need to better plan and implement digitalization initiatives to tap this potential.

Furthermore, digitalization is raising the bar: Increasing price transparency must be met with a clear value argumentation to avoid price and revenue erosion.

You can download the full report here.

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About the Author

Dr. Dirk Schmidt-Gallas is a senior partner with Simon-Kucher & Partners and global head of Simon-Kucher’s insurance practice. He also leads the company’s Frankfurt office. Schmidt-Gallas looks back at more than 15 years of consulting experience in pricing, sales and strategy.

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