Redefining risk management in the insurance industry: the role of digital adoption

Executives may have a high level of awareness of the role and importance of technology in business. However, in many industries, their awareness of how to manage technological risks or how to use them as an effective part of business processes is debatable. Insurtech, or insurance technology, offers numerous benefits for effectively managing risks in the insurance sector. It’s been suggested that recent technological advancements could lead to a significant paradigm shift in the nearly 250-year-old traditional risk management methodology for insurance companies. Although insurers talk about the great benefits of digitalization, it is debatable how accurately they perceive this concept or to what extent they can use it in the insurance value chain process. In this scope, we searched all digitalization efforts of multinational insurance companies operating in Turkey. We analysed all digitalization-related discourse made by insurance companies in insurance newspapers and journals, national press, annual reports, and audit reports between 2016 and 2023 using content analysis and social network analysis. We define the digital competence of companies (digital service competence and digital operational competence) by using the discourses of company executives on digital technologies and classify insurance companies in four dimensions (inactive, followers, operators and innovators). The findings of the study are that insurance companies cannot extend digital technologies to all operational processes of the value chain. In addition, it has been determined that the digitalization perception of the managers is far behind what is described in the literature and the companies are in the position of followers rather than being innovative and operative.Abbrevıatıons: CEO: Chief Executive Officer; CRM: Customer Relationship Management; ERP: Enterprise Resource Planning; EU: European Union; IAT: Insurance Association of Turkey; IPRSA: Insurance and Private Pension Regulation and Supervision Agency; P2P: Peer to peer; UN: United Nations; SDG: Sustainable Development Goals