The IT expense ratio, which is calculated from IT costs in relation to gross premium income, also rose significantly. While its value stood at 2.17% in 2017, 2.3% in 2018, and was of 2.5% a year later, according to the annual IT survey of the German Insurance Association (GDV). In absolute terms, this increase meant a plus of EUR 800 million in 2019 vs. 2018.
"Insurers are investing more than ever in information technology," says Jorg Asmussen, General Manager of GDV. The corona crisis year 2020 provided a further boost to digitization. "In addition to the ongoing modernization projects, there were additional expenses for new servers, licenses and end devices in order to be able to maintain business operations even in lockdown", he explained. Significantly more has also been invested in the efficiency of network operations in order to guarantee the smooth operation of web conference systems. In system development, the optimization and expansion of the data interfaces to the customer will probably continue to be in the foreground in the future. This in particular for the reason that the willingness of customers to deal with digital access channels has increased significantly due to the effects of the pandemic. To what extent the adjustments or scaling of the IT systems will lead to a further increase in IT costs in the industry remains to be seen, the latest issue of the "Focus Digitization" newsletter read.
Changing priorities
As in previous years, the top priority for companies is data security. This is followed by the introduction of agile working methods and customer access channels. According to an ad hoc survey by GDV, the frequency of interaction on customer access channels has increased significantly in the wake of the pandemic - at the top by more than 20% for individual companies.
According to the GDV research, with over 270 million customer connections, there are now around 32 million active online accesses. Against this background, the already very high priority in recent years for the further expansion of digital customer access channels and services has increased even further.
An efficient customer identification based on security and trust is of particular importance in online communication; this applies to both the initial identification and the ongoing authentication process. In this respect, it is not surprising that the digitization topic "Identity Management" has gained significantly in relevance, currently overshadow many of the topics previously of highest importance.
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