COVID-19 to cause major changes for European insurers

Most European insurers expect demand for digital products and services to increase significantly in response to the global COVID-19 pandemic.

The conclusion follows results of a new survey released today by Information Services Group (ISG), a global technology research and advisory firm. Executive of 86% of insurance companies in Europe surveyed by ISG expect customer behaviour to change significantly due to the COVID-19 crisis. And more than 95% fully or partially agree that their customers want more digital products and services.

More than nine in 10 of those responding believe the COVID-19 crisis will accelerate digital innovations in the industry. Meanwhile, 64% of the respondents assume the effects of COVID-19 on their businesses will last longer than a year. Another 21% expect the effects to last between seven and 12 months.

More than 60% of those surveyed expect some of their business partners to disappear from the market as a result of the COVID-19 crisis, even as other companies take their place, with the new businesses, a combination of vendors, insurtechs, and IT service providers.

The report notes that some 2,500 insurance start-ups have entered the EMEA market in the last two years. About 65% of those surveyed see the COVID-19 crisis opening the door to these new market entrants—insurtechs and other online disruptors—to develop new, competing offerings.

European insurance providers believe their competitiveness depends on improved and simplified customer experiences, according to the survey.

While those surveyed expect major changes because of the COVID-19 crisis, most expect traditional sales channels to remain in place. In Europe, more than half of all insurance policies are currently sold through insurance agents, and about 84% of those surveyed believe their companies will continue to sell through multiple channels. Only 16% expect a significant push toward direct insurance sales.

As part of its survey, conducted in collaboration with Infosys, ISG interviewed 290 decision-makers with insurance companies from six European countries in late May 2020 and early June 2020.