Nordic insurers and digital disruption: time’s running out for ‘wait and see’.

Unlike their counterparts in other industries, Nordic insurers are relatively late to the digital party. The insurance industry is inherently conservative. That’s one of its strengths. Dependability, reliability and caution are what we look for from insurers.  But the increasingly pervasive nature of digital is having an impact on the way that we expect our services to be delivered and is shaping our expectations of how we interact with service providers.  These ‘liquid expectations’, that flow from what consumers experience in one sector to another are putting pressure on all service providers to meet new demands.  

But the lack of progress that Nordic insurers have made in digital do not mean that they are ignoring its impact. On the contrary, digital is at the top of the agenda for senior executives and boards. They recognize its disruptive potential. However, the lack of digital maturity means that the industry is finding it hard to harness digital in ways that will have a meaningful impact on both improving the customer experience at the front end and in finding ways to transform operational efficiency in the back office. 

Three approaches to digital progress - realizing the value of digital iteration and digital innovation 

Rather than taking concrete steps to address the possibilities of digital today, many insurers are looking ahead to the possibilities that fintech, or rather ‘Insuretech’, offers in achieving transformational digital change. While it is clear that these do represent the potential for significant disruption and potential, the temptation for insurers to postpone other, incremental, digital efforts until these new approaches reach maturity may prove costly. While the insurance industry should keep a close watch on developments in the Insuretech space, it also needs to focus its attention on the advances it can achieve with digital technologies and approaches that are already available.  

Accenture recommends breaking digital progress into three distinct approaches that can help to identify the practical steps that insurers could take today that will help to address customers’ growing demands for digital experiences and harness digital’s ability to drive operational efficiency. We define these phases as: 

Digital iteration - doing the same things better
Digital innovation - doing new things
Digital disruption - doing new things that render old approaches obsolete. 

And it’s the first of these two approaches that offer insurers the chance to secure the greatest immediate benefits. 

Digital iteration addresses the potential to digitize existing processes or add a digital front-end to customer-facing services. Operationally, that might include optimizing processes or introducing robotic process automation to drive efficiency by eliminating labour-intensive, repetitive manual tasks. 

Digital innovation takes things up a notch by providing new services and features to enhance existing products. That could include, for example, exploring the possibilities of connected insurance through in-car sensors for auto, wearables for health/life and the proliferation of Internet of Things devices for home insurance. 
The final category, digital disruption, creates entirely new business models. For example, peer-to-peer insurance that harnesses digital platforms to create groups of policyholders who effectively insure one another on a ‘sharing economy’ basis. 

The speed at which digital can disrupt not just businesses but whole industries is clear from other sectors of the economy. Nordic insurers need to do more than take a ‘wait and see’ approach to the disruption that will arrive in their industry. Instead, they need to identify and act on more immediate incremental opportunities to improve their business or customer experience.  Taking small steps today could prove invaluable in being ready for the more transformational impact of digital disruption when it hits. 


Ammad Butt

Senior Manager - Financial Services

As the Distribution & Marketing lead for Insurance at Accenture Denmark, my work focuses on helping our clients to understand their customers and then, armed with that understanding, develop the capabilities that will help them outperform the market. Increasingly, those capabilities are digital. What I see in digital transformation is the coming together of IT and business issues. Helping our clients to plan and execute their transformation journey is a core part of my role, and brings together both parts of my academic background which is firmly in both camps, having earned an M.Sc in Computer Science from Copenhagen Business School and an MBA from the London Business School.

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