Digitalization in insurance companies

Abstract

Purpose – the main idea of the article was to characterize the process of digitalization in insurance companies through the implementation of information and communication technologies (ICT). This research examined the relationship between the expenses for information technologies of selected insurance companies and the results of their activity. Research methodology – the research had empirical character and was based on the analysis of two groups of indicators: digitalization and insurance. The first group characterizes the level of insurance companies’ investments in ICT, and the second – the results of insurance activity. Data were collected from notes to financial statements of top 4 European insur-ance groups. The results have been received based on correlation analysis. Findings – the results of the research showed that there is a different tendency in the raising of ICT investments and the values of gross premiums, claims, and expenses. This result deals with the important question in insurance if the higher invests in technologies could be a factor of insurers’ effectiveness. Research limitations – most important limitation relates to the lack of complete data about information and communica-tion technologies in insurers. It is closely connected with some ambiguity in defining modern information technologies. Practical implications – the results of the research could be used in the decision-making process in practice or future re-search. Originality/Value – in the research the possibility to combine analysis and comparison of selected parameters of digitali-zation based on financial statements of insurance companies was described.

Application of customisation and personalisation in digital solutions of the non-life insurance market: a case study of Lithuanian, Latvian and Estonian e-sales platforms

“…In the past decade, researchers mostly focused on more combined analysis of digital insurance outcomes at the operational and strategical level in insurance organisations and overall insurance networks. Key research areas were: the development and deployment of multi-channel or multi-access technical solutions and their integration to the omnichannel-based insurance business model; a change of organisational mindset in insurance organisations and overall cultural barriers for a digital transformation in the insurance industry; a transition to a platform-based interaction and systemic value creation; the development of new personalised, situation-based mass insurance products like insurance of cyber risks or sachet insurances (bite-sized insurances) products as pets or cyclist insurance; a focus on a new mass customer base, which is strongly influenced by a growing millennial and z cohort, shared economy principles, and demand-driven insurance needs; Usage-Based Insurance (UBI) and On-Demand Insurance (ODI) based on improvements in risk and capital management as well as underwriting of automatic algorithmic decision-making processes; ensuring personal data protection and full access to it as well as reducing a negative influence on an end-user from information asymmetry situations or extreme forms of dynamic pricing (Wiesböck et al, 2017;Bohnert et al, 2019;Łyskawa et al, 2019;Baumann, 2020;El Arif, 2020;Baranauskas and Raišienė, 2021). To be more specific, this particular research contributes to the following scientific studies of insurance digitalisation.…”

Expert-based evaluation of digitalization and mass customization in the Baltic non-life insurance online platforms

“…Source: created by the authors based on Kamis et al, 2008;Salvador et al, 2009;Piller, Thorsten, Ihl and Salvador, 2014;Risdiyono, Imam and Affan, 2016 Digital Insurance Transformation Implications and Practical Outcomes Digitalization determines primary and supporting activities in the insurance-specific value chain at the operational infrastructure and strategical decision level. A strong impact on the meaning of the insurer structure of all insurance ecosystems is noticed (Eling & Lehmann, 2018;Albrecher et al, 2019;Łyskawa et al, 2019). Recently, the adoption of agile approaches to manage existing IT infrastructure and overall organization limitations for in-house development has been spotted (Bohnert et al, 2019).…”

“…Insurers struggle with alignment to legal compliance procedures or requirements of personal data privacy and availability and also fight to solve new issues of information asymmetry. It is essential to reduce the digital information www.ieeca.org/journal 190 asymmetry between a client and an insurer under reasonable conditions of rising costs and risk management (Klapkiv & Klapkiv, 2017;Albrecher et al, 2019;Łyskawa et al, 2019). Potential risks after the information asymmetry in digital insurance products sales and after-sale services cover insufficient access to information or understanding of the product, service, or its provider, and data security, as it can lead to potential misuse of personal data or exclusion of consumer segments due to a granular risk categorization.…”

“…The fourth part provides a discussion on research limitations and future directions, and the fifth concludes the findings. Digitalization, including digitization, digital transformation, digital technology, online insurance, or digitalization of insurance in combinations of urbanization, individualization, and population aging receives much scientific interest in the modern insurance research field (Klapkiv et al, 2018;Bohnert et al, 2019;Łyskawa et al, 2019). Researchers of the insurance field carry different definitions at the semantical level, where one side stands for an interpretation of the expression digitization of insurance that is limited to implementation of Information and Communication technologies into insurance in the context of digitalization processes (Stoeckli, Uebernickel & Brenner, 2016;Cappiello, 2018).…”

“…This theoretical extension shows an ongoing insurance industry transition from standardization and product to the platform-based business model and Service-Dominant Architecture (SDA), and relies on recent studies on Insurtech and their influence made by Zolnowski and Warg (2017), Stoeckli, Dremel and Uebernickel (2018), and Warg et al (2019). Scientific studies of digital insurance in East Europe and Baltic countries also reveal that the rise of digitization, digitalization processes, and digital transformation strategies is only determined by global insurance business tendencies, technological development and costcutting, and correlates to external factors as regional economic growth and the index of internetization (Klapkiv et al, 2018;Łyskawa et al, 2019;Zarina et al, 2019 www.ieeca.org/journal 187 Source: created by authors by following Porter, 1985;Salvador, Holan andPiller, 2009, Eling andLehmann, 2018 As per Figure 1, the outcomes of the Mass Customization concept with personalization features can be identified in digital insurance marketing, product development or underwriting activities. Application of the modern e-Mass Customization concept and online customization frameworks allows the insurance industry firms to minimize the influence of the traditional Mass Customization concept version obstacles, including optimization of external demand variety versus internal product/process complexity and shortening the implementation period (Kamis, Stern & Ladik, 2008;Daaboul, Bernard & Laroche, 2012).…”