The Digital (R)evolution of Insurance Business Models

Abstract

The paper focuses on the digital transformation that is greatly affecting the insurance industry and forcing radical change upon corporate culture, products and processes, customer relationship and relations with the sector's various competitors. By responding to three research questions, the paper aims to contribute to the academic discussion and proposes to offer useful cues of reflection to the insurance management, since the dissemination of new technologies needs to move towards continuously updated business models.

Future of Insurance 4.0 and Insurtech

“…The empirical evidence and academic studies tend toward relationships of synergy rather than competition between the two parties. 117 Several insurance companies are looking for new business and partnership models with insurtech organizations to innovate every phase of their value network. 118 The leading insurance companies have established solid partnerships with the top insurtech organizations.…”

“…117 Several insurance companies are looking for new business and partnership models with insurtech organizations to innovate every phase of their value network. 118 The leading insurance companies have established solid partnerships with the top insurtech organizations. They have set up venture capital funds for their acquisition and to benefit from the solutions they are developing.…”

“…Regulations and lack of expertise serve as entry barriers when insurtech organizations want to expand their businesses. 122 To end with another quote, this time attributed to Charles Darwin: "It is not the strongest of the species that survives, nor the intelligent, but the most open to change." 123 This message is also true for insurance companies.…”

Estimating the relation between digitalization and the market value of insurers

“…This becomes even more important as rising customer expectations, the effects of the financial markets crisis, and the zero interest rate policy lead to an increased competitive pressure. In general, there is no doubt on the strong impact digitalization will have on the insurance ecosystem (see, e.g., Cappiello, 2020). It is considered to affect the whole insurance value chain, from product development to pricing/underwriting, sales and distribution, policy and claims management, and asset and risk management (Eling & Lehmann, 2018).…”

How Digitalization Affects Insurance Companies: Current Status And Future Expectations

“…However, the common point that insurers agree on is that digital technologies, although they have already transformed many other industries to a great extent, are quite late in the transformation of the insurance industry and their current potential is not yet fully understood. Many recent scientific studies point to a paradigm shift in the insurance system in the near future (Moneta, 2014;Berger et al, 2016;Catlin et al, 2015;Johansson and Vogelgesang, 2015;Biener et al, 2015;Eling and Lehman, 2018;Cappiello, 2020). Startups and data providers that were not actors of the insurance system in the past are today both the biggest supporters of insurance companies and a major threat to the future.…”