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With global average investments in digital technologies of around US$45 million per company in the last three years, the insurance industry is lagging other industries, both in its level of digitalization and in its ability to realize financial returns on its digital investments.

Accenture cross-industry research identified a significant gap between those insurance companies with strong digital and financial performance and those that were digitally savvy but had failed to achieve the anticipated financial rewards.

Since digital technologies lie at the heart of insurance’s future growth potential, insurance leaders must make sure their digital investments multiply value creation.

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Key findings

Enhancing digital performance

The Accenture Digital Performance Index assessed how companies use digital technologies and channels to plan, make, sell and manage their business activities. Four fundamental success factors offer insurance companies significant returns:

  1. Equate digital with driving value: High performers show a 64 percent improvement on digital leaders in terms of revenue growth, and a 48 percent difference on profitability (return on equity).

  2. Apply a digital multiplier: Some insurers are successfully applying digital investments to increase gains from the current business and help build a sustainable future.

  3. Balance investments across all digital dimensions: Insurers see digital as a key component of their growth strategies, and often have devised a partial plan on how to integrate digital activities into their businesses.

  4. Adopt geo-specific portfolio management: Running a cross-market platform approach that suits individual insurers’ geographic needs, avoids duplication and brings scale to investments.

The insurance industry is trailing the digital pack

The insurance industry lags both in its level of digitalization and in its ability to realize financial returns on its digital investments.

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Digital success

Five steps to digital success in the insurance sector from Accenture

Recommendations

Five steps to digital success in insurance

Winning insurers need to:

  1. Measure digital progress: Establish clear group-level digital-maturity and value-creation measurements to assess time-to-value for investments.

  2. Focus on the digital multiplier: Understand which capabilities are structurally local, or specific to one line of business or product, versus those that apply across most dimensions.

  3. Balance investments and execution efforts: Involve all four areas of digital performance—plan, make, sell and manage—at a group and local level.

  4. Be geo-savvy: Differentiate with smart geographic and financial portfolio management.

  5. Rapidly share successes: Share leading practices in areas where high performance digital capabilities cannot be applied.

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"As winning insurers show, digital high performance is less about tactical, short-term investments and more about having the right capabilities, enabled by digital, to reduce local dependencies, streamline the core business and move them from risk to reward."

About the research

Accenture developed the Digital Performance Index based on a study of 343 leading global companies across eight industries. The Index quantitatively assesses the level of digital investment and progress across four business functions:

  1. Digital strategy (Plan): How digital trends are reflected in strategic plans and implementation.

  2. Digital production and delivery (Make): The use of digital technology in innovation, production and delivery.

  3. Digital customer experience (Sell): Customer experience management across digital channels.

  4. Digital corporate culture and operations (Manage): The presence of digital technology and mind-set in corporate culture and internal operations.

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