Europe's Digital Decade – How Does the Policy Influence the Future of the Insurance Industry
Maryna Kozlova
Customer Success Lead | Client-Centric Solution | Streamlining Workflows and Mastering Productivity | Making Automation Happened | Enterprise Software Solutions
Well, here we are in 2024, which means Europe is already nearly halfway through its Digital Decade project. Surprisingly, the trends that formed the basis of the campaign back in 2020-2021 are still relevant.
Of course, it would be nice to expand that list of development vectors with fresh technologies:
These technologies have been implemented quite well into the Digital Decade program. Sometimes even faster than we expected.
One thing, though: this is a general program and doesn't highlight any specific niche. Well, today, I'm going to narrow it down and walk you through how all this plays out in the insurance industry.
Six Key Digital Rights and Principles
It would be strange if the goal of Europe's Digital Decade was to enrich certain layers of the population, business, or government. Nope, that's not the plan. The European Commission is doing what's best for us, the people.
The concept of the Digital Decade itself resembles a pyramid, where layers are formed as follows:
For businesses, the Digital Decade brings several advantages, such as attracting new audiences, scaling up the business, and modernizing products and services. This is a big deal for the insurance sector, which was traditionally less focused on modernizing its internal and external processes. But saying that today? This statement is no longer entirely accurate.
Just consider the forecasts from Allied Market Research: it's expected that by 2030, the value of digital insurance platforms will reach $279.51 billion.
If you think about it, the Digital Decade program's roadmap completely justifies this specific segment's growth, with a CAGR of 11.3% between 2021 and 2030.
Now, let's move on to what this means for the insurance world through the lens of digital rights and principles outlined by Ursula von der Leyen at the end of 2022.
People at the Centre
As I've said before, the main focus of the program is on people. Or the end consumer from a business perspective. For insurance providers, nothing changes in this regard. But now they must also provide the digital space for their audience.
For example, digital portals with live support or AI bots that help users choose and personalize insurance programs. Also, if necessary, users can open a claim remotely and provide evidence to receive compensation.
Freedom of Choice
We've all heard it before from businesses, "This is what most people like, so take it; there's no alternative." And this violates a fundamental principle of democracy, namely freedom of choice. It's not fair to say people are at fault when an insurance company decides it's not worth their while to cover certain cases with policies.
Freedom of choice isn't just about having different options. It's about making those options fit. In this context, insurance providers still have room to grow. Especially when it comes to the digital space itself. For example, instead of offering ready-made policies, one can provide a builder where the user assembles a custom package. An illusion of choice? Certainly, but it's a step up from being told what we want, right?
Safety and Security
Against the backdrop of rapid technological advancement, discussions about cybersecurity are becoming more frequent. This applies to both the use of AI and the digital literacy of every user. Having a truly safe digital environment feels a bit like wishing for the moon. The truth is, the definition of digital security is rather blurred.
Nevertheless, the insurance segment can already take these steps toward creating a secure information space:
The users must know how their data is being used, stored, and protected. This is not just a matter of trust but also of practical significance.
Solidarity and Inclusion
Whenever I think about this, my mind jumps straight to Elon Musk and his dream to provide wireless satellite Internet access to the entire world's population. Behind philanthropic statements, of course, lies the possibility of manipulation. But you've got to admit, the concept is pretty neat and clearly fits into the program of the Digital Decade.
In the context of insurance providers, things are rather more grounded than conceptual. Namely, it's about balancing market laws with the actual needs. For example, when forming a policy, companies have to include both common cases and those with a 0.1% chance, and that affects the cost. Nobody's in the business of losing money, right? But there's room for negotiation, such as an option of personal policy assembly at a digital portal.
Participation
In recent years, it seems that we have lost sight of the fact that the information we give to businesses is actually ours, not theirs. It's our right to request that our confidential data be removed from their servers.
Of course, this also applies to the insurance industry, where there is a conflict about how to provide services without gathering and saving sensitive data. Let's be real; they can't do their job without some of that info. However, insurance companies could provide a detailed report on how and where the data is stored, how it's utilized, and with whom it's shared and for what purpose.
Sustainability
The greening of technologies is a concern for all businesses and end consumers alike. It is primarily our responsibility to ensure the health of our planet, as we all have an impact to some extent. While some companies, such as Apple, have made progress in their Zero Emission program, we are still far from achieving an ideal balance.
The insurance industry relies heavily on equipment, especially data centers and direct servers. So, it's clear there's a big responsibility to keep things eco-friendly. The insurance companies should maintain their tech infrastructure properly, upgrade it responsibly (by using components made from recycled materials and disposing of old parts correctly), and adopt environmentally friendly practices. They can add greenery to facilities and revitalize equipment with solar panels or wind turbines.
Smooth Adaptation: How Insurers Can Start Changing Now
I've laid out the main pointers already, but there's one more thing on my mind: we've got to shift our focus. It's time to move from market priorities to service personalization.
This is especially relevant to how insurance companies use data and communicate with their clients. Plus, there is a big need to restructure digital infrastructure and lay the groundwork for further modernization.
Ultimately, you can freely use the main concepts of the Digital Decade program for business transformation, regardless of its profile and scale.
So, how drastically do you think the insurance industry's future will change? Share your thoughts in the comments.