Insurers Look to M&As to Digitalize Distribution

Almost three-quarters of global insurers believe their sector has failed to show leadership in digital innovation and an increasing number now regard investment and acquisitions in digitalization a priority to improve distribution, according to a survey by Willis Towers Watson.

“Insurers recognize the importance of building a sustainable digital infrastructure to improve customer engagement and as an essential distribution channel, which is likely to be addressed through a combination of internally driven innovation, joint ventures and M&A activity,” said Jack Gibson, global M&A lead, Willis Towers Watson M&A Risk Consulting. “Insurers that hesitate could very well get left behind and fail to capture future generations of younger policyholders, who are more likely to engage via digital distribution.”

Almost half of the survey respondents expect to make an acquisition over the next three years, directly driven by the desire to acquire digital technologies, including 14 percent that intend to make more than one acquisition.

Ninety-four percent of respondent expect distribution to be where digital technologies have the greatest impact over the next five years, according to the survey, which was conducted of 200 property/casualty and life insurance executives in conjunction with Mergermarket.

“Distribution is a recurring theme for insurers surveying the digital landscape, as it offers opportunities to find new ways to market and to build closer, more engaged relationships with the consumers of their products and services,” said Gibson.