02 November 2022

Germany’s Digital Insurance Paradox

Written By Ingo Weinem, Global Co-Head of Insurance at EPAM Systems

Germany’s Digital Insurance Paradox

What five key changes do insurers in the German market need to make to improve online insurance purchasing rates? Find out in EPAM’s 2022 report, Insurance: The Digital Paradox (Report downloads in German and English.)

The pandemic-related lockdowns and other restrictions of 2020 and 2021 accelerated and intensified changes in society and markets that had already been under way for many years. Key among these have been substantial increases in both the amount of time people spend online, and their willingness to buy there.

In light of the rapid and sustained expansion in online shopping, these trends have driven insurance providers to offer digital products and online buying experiences that customers find attractive and efficient.

There’s work to be done EPAM’s 2022 report, Insurance: The Digital Paradox, explores the German insurance market to discover where customers are dissatisfied with their online buying experiences, and how companies can improve., explores the German insurance market to discover where customers are dissatisfied with their online buying experiences, and how companies can improve.

The figures suggest there is much to be done. Consumer intent to buy or renew insurance online has increased dramatically – nearly doubling – from 27.5% of customers in 2017 to 54% during the pandemic. However, fewer than one in four (23%) car insurance policies, and a mere 6% of life insurance policies are actually purchased online.

Following EPAM’s research into the Swiss market in 2021, this year’s study examines consumers’ key pain points, challenges and opportunities as they buy online in the German home, vehicle and life insurance markets.


The research – approach and results

The 2022 study included ten popular providers in the German insurance market and 120 consumer participants, of diverse ages, incomes and gender groups. Thirty distinct customer journeys—taking in home, life and car insurance purchases—from each of the ten providers

were followed, each by multiple participants. Results were analysed from both behavioural and qualitative perspectives.

Presenting insurance providers with both opportunities and reasons for concern, the three key issues presented by the report sit together under the general theme, “customers are not happy.”


Three challenges

Participants reported too much product choice and lack of easy ways to compare packages, making it hard to select the best insurance for their needs. “Selecting the specific model of vehicle was challenging,” said one Gen Z participant.

They found that providers’ websites typically demanded too much information from them, making customer journeys too long. Car insurance purchases were the worst offenders here, averaging over seven minutes to complete, while home and life insurance customer journeys each averaged just under five minutes.

Compounding the situation, in-journey assistance was often inadequate and hard to access – typically either through bots, which failed to provide sufficient information, or via contact with human insurance agents. Participants found both options frustrating.

Evident in most of the providers’ websites, these issues frustrated participants as they tried to purchase insurance, resulting in broken customer journeys. In the open market, it is likely that such issues are driving abandoned shopping cart rates, restricting adoption of online insurance purchasing and hampering sales.


Germany and Switzerland – similarities and differences

There are both similarities and differences between the German and Swiss market research. A key feature, as was the case with the Swiss market in 2021, is that insurance providers must refine and hone their understanding of what consumers want from their online insurance purchasing experience – and deliver it.

While Swiss consumers typically wanted to communicate directly with a human agent before finalising their purchase, German consumers were happier with a fully automated, digital buying journey. This attitude underlines the importance of good, easy-to-access in-journey help.

In Germany, the Boomer age group completed their customer journeys more rapidly than their younger counterparts. This may be in part because German Boomers are more comfortable with buying insurance and with complex and even tedious buying processes, than younger German consumers.

The report looks in detail at clarity of information provided to customers, availability of support during the selection and buying process and customer journey length. Also explored are findings suggesting that while individual insurance providers’ websites fail in multiple ways, aggregator websites create “overwhelmingly positive experiences,” suggesting that individual insurance providers can learn from aggregators’ customer journey approaches.


Five actions to take

EPAM wraps the report up with five recommendations for insurance providers to help improve German customers’ online buying experiences:

1. Shorten and accelerate customer journeys

2. Avoid jargon, describing options in clear, simple language

3. Improve the quality and availability of automated support throughout the journey

4. Learn from aggregators’ websites and their simple, streamlined customer journeys

5. Undertake research into optimal customer journey design, building business strategy and customer interfaces accordingly


Getting the customer journey right will pay dividends in diverse areas, including sales revenues, customer satisfaction and reduced cost of sale.


Download the report here (Report downloads in German and English) and read more about EPAM’s in-depth insights and recommendations.

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