The Association for Cooperative Operations Research and Development (ACORD), in cooperation with Microsoft, has released its study on the digital maturity of the world’s biggest insurance carriers – and it found that not everyone is as on board with full digital transformation as the headlines might suggest.
The global standards setting body noted in its report that while the insurance ecosystem continues to rapidly evolve – and with the global pandemic also continuing to disrupt traditional business processes – “much work needs to be done” among insurers.
Among the 200 largest global insurers assessed in ACORD’s 2022 Insurance Digital Maturity Study, fewer than 25% have “truly digitized” the value chain. Meanwhile, more than 10% of the assessed companies are “not appreciably leveraging” digital technologies within their current business processes, it was found. In addition, more than half of the insurers are “still exploring” how digitization can be applied to their respective business models.
On top of the digital maturity metrics, ACORD’s report found that companies which embraced digitization to establish tech-enabled operating models throughout their organizations outperformed others in the industry, ultimately driving their improved value creation. ACORD also found a correlation between digital maturity and increased financial performance, and that there exists a performance gap between highly digitized insurers and laggards – a gap which continues to grow year-over-year.
“The global pandemic amplified existing market forces, accelerating transformation that was already underway at forward-thinking organizations,” commented ACORD president and CEO Bill Pieroni. “The industry saw changes in 10 months that may have otherwise taken 10 years. The gap between those who have been prioritizing digitization, and those who have systematically underinvested, is now impossible to ignore.”
“Having seen the pandemic accelerate our customers’ digital journeys, we believe the industry is in the midst of a profound change,” said Microsoft insurance industry executive Jonathan Silverman.