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Insurer Digitalization: Are you a Competitor or a Laggard?

While just about every insurance company touts the importance of digitalization to improve the user experience, improve performance, and build business, the fact is that fewer than 30% have truly digitized the value chain, while 13% are not leveraging digital technologies within their current business processes.

The findings come in the fourth edition of the ACORD Insurance Digital Maturity Study, which looked at the top 130 global insurance carriers representing $2.3 trillion in 2019 premiums and 38% of global market share, covering virtually all lines of insurance business.

“The insurance industry is at a critical and uncertain inflection point,” the study states. “Insurers who fail to meaningfully differentiate their offerings will suffer from a lack of consumer-buyer engagement, give up business to competitors, and leave themselves vulnerable to disruptive entrants. Slow-to-adapt incumbents who insist on viewing their products as commodities, competing only on price, will not be able to succeed against those able to adopt a buyer-driven approach, learning how to attract and retain customers through brand differentiation and customer-centric capabilities.”

The study breaks down insurers into five levels of digital maturity:

  • Digitized competitors, which truly applied digitization to shape consumer-buyer behavior, comprised only 11% of respondents.
  • Digitized firms, which use digitization to optimize efficiency, comprised 18% of respondents
  • Digital aspirations, carriers that are still in the early stages of digitization, at 45%
  • Localized digitization, which use isolated instances of digitization, at 13%, and
  • Digital laggards, companies that demonstrate limited awareness of digitization, sometimes even ignoring it altogether, at 13%.

In examining the respondents’ financial metrics, including premiums and EBITDA, the study determined that insurers that have embraced digitization perform materially better than those that have not. Digitized firms nearly doubled the study average in earnings, while digital laggards delivered below average performance across all metrics.

The most successful of digital firms operate under a centralized organizational structure, and have a national versus regional or global geographic scope, the study found.

Over the 10 years covered by the study, global premiums grew approximately 2%. Only 21% of global insurance CEOS believe the economy will expand over the next 12 months, down from 50% just 2 years ago.

Because of the maturity of the insurance market and a lack of organic growth, insurers are hanging their hopes on swiping customers from their competitors – even if only temporarily. That’s why customer-buyer behavior is their top concern, and technology is the key to succeeding with this strategy.

Stats show that insurance consumers increasingly want a digitized experience – in North America alone, the percentage of global consumer buyers interacting with their insurers through digitized mechanisms has doubled, from 40% in 2015 to 80% in 2020.

High-performing insurers know this, and are focusing their efforts and investments in three areas: consumerization, ecosystem integration, and data and analytics. “Digitization is the thread that ties these strategic imperatives together and allows insurers to address them effectively,” the study states.

However, the study finds there are some key imperatives for insurers to execute the digital journey:

  • Project and change management – Digital initiatives must be enterprise-wide to fully succeed.
  • Partner management – Carriers must foster mutually beneficial relationships with third parties to develop digital capabilities throughout the business.
  • Culture – Insurers must ensure that their culture and strategic intent are aligned in order to succeed with digitalization.

The full 20-page ACORD 2020 Insurance Digital Maturity Study white paper, which includes strategic and execution imperatives for successfully developing digital capabilities, is free to download for ACORD members. For more information or to download the white paper, please visit

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