Evolution of the Insurance Institution Under the Influence of Digital Financial Technologies (FINANCE MONEY AND CREDIT)

Summary

• The average insurance penetration in OECD countries increased from 6.0 to 6.2 % of GDP in 2024.p.2
• Nominal premium growth reached 11.9 % in the life insurance sector across reporting jurisdictions.p.2
• The non-life insurance sector recorded a nominal premium growth rate of 8.2 %.p.2
• An empirical study based on 76 insurance companies demonstrated a U-shaped relation between digital transformation and total factor productivity.p.2
• A systematic review of technology adoption in insurance synthesized findings from 65 academic papers.p.3

Key insights

1. Digital financial technologies are driving a paradigm shift in insurance from post-disaster compensation to continuous risk prediction and preventive risk management.p.1
2. In OECD member countries, average insurance penetration expanded from 6.0 to 6.2 % of GDP in 2024.p.2
3. Incumbent insurance providers focus technology investments on updating existing processes, whereas InsurTech entrants use artificial intelligence and big data to redefine the value chain.p.2
4. Digital transformation initial costs may cause a temporary drop in insurer efficiency before achieving higher total factor productivity at mature adoption stages.p.2
5. Insurers are shifting from periodic customer interaction to continuous digital engagement supported by real-time data analytics.p.4
6. Embedded insurance seamlessly integrates coverage into third-party product and service purchase flows within digital ecosystems.p.4