The total annual volume of property and casualty (P&C) and life insurance policies sold through digital channels in Europe could reach €25 billion (£22.7 billion) in 2016, more than double the 2012 value of €12 billion.
This is according to the latest research from consulting firm Accenture.
Accenture questioned 78 insurers across Europe, and found that policies sold through digital channels are expected to account for 18 percent of European insurers’ total annual new business premium volume in 2016, compared to 11 percent in 2013.
The study also found that three-quarters (78 percent) of European insurers are planning to increase investments in the digital transformation of their sales and distribution functions, and expect to spend €27 million, on average, over the next three years doing it.
Piercarlo Gera, global managing director of Accenture Distribution and Marketing Services, said: “This transformation is critical to attract consumers, especially the 'digital generation', or Generation D, which is permanently connected and used to purchasing books, electronic devices, music and travel online.
"Insurers must invest in capabilities with a clear strategy to improve the overall customer experience with every interaction.”
The complexities of managing changes across physical channels is perceived by insurers in Europe as the most important challenge in the digital transformation of their distribution, cited by 85 percent of respondents.
Other significant barriers cited by insurers included the constraints of their IT legacy systems (81 percent) and the inability of their organisation to act quickly (81 percent).
The study also indicates that 89 percent of European insurers are expecting competition to intensify in the insurance distribution market over the next three years. Almost two-thirds (64 percent) believe that this competition will come from non-insurance players, such as Google, or e-commerce giants like Amazon.
Despite the customer demands and the threats to business, in the survey 60 percent of European insurers confessed that they currently do not have a digital strategy in place, or that their strategy is limited to only a few areas - such as sales or customer interaction processes - and fails to cover the entire insurance value chain, from product creation and underwriting to claims settlement, including policy administration.