Digitalization – the Great Disappointment

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

Dirk Schmidt-Gallas

January 9, 2018

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.

Dirk Schmidt-Gallas

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.