Insurance companies in Germany express optimism about the coming years
The German insurance industry is responding to the COVID-19 pandemic by accelerating digital transformation and focusing on sustainability, according to a PWC survey of 112 industry leaders in June 2021.
During the pandemic, German insurers have adapted rapidly to remote work, increased claims, and customer service demands by adopting digital platforms, automation, and insurtech solutions. This shift has enabled operational efficiencies, better customer interaction, and resilience against disruption.
Key digital adaptation strategies include expanding digital platforms to streamline customer service and claims processing, adopting advanced workflow software and AI-driven decision support, leveraging cloud technologies, and automating routine underwriting and portfolio management tasks.
Sustainability efforts are increasingly integrated into ESG compliance and risk management frameworks, aligning with broader European sustainability goals. However, direct pandemic-driven details for German insurers specifically are limited in the presented results.
Despite these efforts, challenges remain in implementing technologies like artificial intelligence (AI). Integration of AI requires significant upfront investment and organizational change. Ensuring cybersecurity and data privacy, especially in the context of sensitive health and financial information, is another challenge. Balancing legacy system constraints with the need for digital agility is also a concern. Developing and maintaining innovation-driven outsourcing and collaborations for technological resilience is another hurdle. Adapting existing workforce skills and managing cultural change in traditional insurance environments is another challenge.
Despite these challenges, 54% of leaders see their company as poorly or very poorly positioned in the area of artificial intelligence. Only 34% of leaders give a good rating to their company's position in artificial intelligence. However, 78% of leaders see their company as well-positioned in sustainable topics, with 47% of leaders concerned about a future shortage of qualified employees in this area.
Improving technical processes in claims management is a potential way for companies to quickly reach pre-crisis growth levels. Mathias Röcker, head of insurance at PWC Germany, stated that confidence in the industry is growing due to vaccination progress and easing of lockdown measures.
However, only 63% of leaders rate their company's handling of new technologies as good. This suggests that while the industry is making strides in digital transformation and sustainability, there is still room for improvement in effectively implementing new technologies.
- The sustainable topics are not just a passing trend for German insurers, as 78% of industry leaders see their companies as well-positioned in this area, highlighting the importance of environmental-science and the sustainability of the business.
- In parallel with their efforts in sustainability, German insurance companies are also investing in science and technology, especially in artificial intelligence (AI), but the survey reveals that 54% of leaders see their company as poorly or very poorly positioned in the area of AI, indicating the need for more investment and organizational change.
- The digitalization of the German insurance industry is not limited to improving technical processes in claims management or adopting digital platforms and automation, but also includes a focus on finance, with 63% of leaders rating their company's handling of new technologies as good, emphasizing the need for a balance between digital transformation, business growth, and environmental sustainability.
