European insurance industry leaders are doubling their digitalisation drive to enhance customer experiences and streamline operations in the face of looming recession threats to their economies.
According to a recent survey conducted by Information Services Group (ISG), titled ‘Pulse Check – State of the European Insurance Industry’ conducted in the fourth quarter of 2023, nearly 270 business decision-makers and IT leaders were polled in the European insurance sector.
A news report from Reinsurance News, an industry-focused online media indicated that the results showed that two-thirds of respondents were planning to expedite their digital investments over the next two years, with a focus on improving payment channels, cybersecurity, augmented and virtual reality, and artificial intelligence (AI).
The key strategic priorities identified by survey participants include acquiring new customers and leveraging digital channels to explore new business opportunities.
The research findings emphasized on digital offerings and personalised services aims to drive customer acquisition and retention in an increasingly competitive landscape.
The news report quoted the President of ISG EMEA and Chief AI Officer, Steve Hall, as highlighting the shift towards a “digital first” approach among European insurers, emphasising the role of next-generation technologies in reshaping business operations and improving market positioning.
The research findings further reflected that AI, in particular, was experiencing significant growth, with a notable increase in budget allocations and a focus on leveraging advanced AI methods such as natural language processing and machine learning.
Despite the growing interest in AI, the survey shows that AI development is still in its early stages for many respondents, with only a fraction actively developing enterprise-wide solutions.
Additionally, challenges such as data silos and cybersecurity remain areas of concern, prompting increased investments in digital risk management and IT security.
Strategic partnerships are seen as vital for accessing digital capabilities and specialised talent while mitigating development risks.
Furthermore, insurers are striving to strike a balance between insourcing and outsourcing to address evolving labor market dynamics and talent retention challenges.
It noted that as traditional carriers face competition from tech companies and insurtech startups for top talent, effective talent management strategies were becoming increasingly crucial in meeting the demands of transformative technologies.
