Closing the Gap: Digital Insurance – Executive Priorities from Digital Insurance Maturity 2025

Sep 2, 20254 min read

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Introduction

The insurance industry has reached an inflection point. Deloitte’s Digital Insurance Maturity 2025 study — spanning 93 insurers across 16 EMEA markets — shows the digital gap between leaders and laggards is no longer a matter of incremental advantage. It is a structural divide that will shape competitive outcomes for the next decade.

For executives, the report delivers a clear message: digital experience is now a baseline expectation. But while user experience (UX) maturity averages 76%, functionality lags at 50%. Customers are not comparing insurers to each other, but to the digital ease of tech giants, e-commerce platforms, and banking innovators. This mismatch creates both a burning platform for modernization and an opportunity to reframe growth strategies.

Innovation Strategy: From Incremental to Market-Shaping

The study highlights that “Digital Champions” — insurers scoring above 70% functionality — outperform laggards 1.8–2.3x in claims, prevention, and contract management. Their advantage is not only efficiency but innovation.

In the Nordics, for example, insurers are testing video calls with experts to estimate damages, diagnostic video calls for risk prevention, and even customer-directed charity donations of unclaimed funds. Others allow clients to request cancellation of their previous contract directly through the new provider, eliminating friction in switching. These are not trivial features — they represent opportunity spaces where C-level executives can differentiate products, drive loyalty, and set new market benchmarks.

Innovation also requires the right foundation. Deloitte emphasizes composable architecture — cloud-native, API-enabled systems with orchestration layers — as the critical enabler. Without this backbone, even the most elegant front-ends risk becoming cosmetic upgrades.

Infrastructure Bottlenecks: The Drag on Digital Ambition

The report is blunt: back-end modernization is no longer optional. Seamless UX built on legacy cores creates performance bottlenecks, data silos, and reliability issues that erode customer trust.

Executives must prioritize:

Policy administration modernization to support agility and compliance
Claims engines capable of automation and real-time responsiveness
Data architectures that enable hyper-personalization through AI

The transition requires investment discipline, but delaying modernization risks locking insurers out of embedded ecosystem partnerships where speed and integration matter more than brand recognition.

AI at an Inflection Point

Perhaps the most striking insight is that insurers are entering a new phase of AI maturity. After years of experimentation, generative AI is shifting from pilots to enterprise deployment. Yet, its use in front-end processes such as claims intake, policy queries, and cancellation remains underdeveloped.

For executives, the strategic imperative is twofold:

Deploy AI where it directly impacts customer value. Frontline servicing and claims are ripe for transformation, with customers increasingly preferring digital-first interactions.
Lead with governance. Employees perceive their companies as 2.3x less empathetic when AI is introduced without cultural adaptation. Trust programs, reskilling, and empathy-led leadership are now as critical as model performance.

Those who balance ambition with governance will turn AI into an enterprise productivity engine while building long-term trust with regulators, employees, and customers.

Geopolitical and Regional Dynamics: Leapfrogging and Benchmarks

Regional results reveal two diverging paths:

Nordics as global benchmarks. Four of nine Digital Champions are Nordic insurers, with UX scores averaging 90%. Their formula: relentless customer-first design, rapid adoption of video and digital-first services, and integration of empathy into automation. They provide replicable models for global insurers.
Middle East as leapfroggers. Free from entrenched legacy systems, Middle Eastern insurers are scaling through embedded partnerships with banks, travel platforms, and retailers. Favorable regulatory frameworks and ecosystem thinking allow them to bypass stages of maturity that slow Western markets. For C-level leaders, this is both a competitive threat and a partnership opportunity.

Executives must recognize these geopolitical dynamics not as curiosities but as signals of how regulation, infrastructure, and market openness shape digital acceleration.

Intellectual Property: Beyond Best Practices

The report indirectly surfaces a critical strategic gap. Most insurers focus on adopting “leading market practices.” But sustainable advantage will come from proprietary digital IP — algorithms, unique data models, and customer engagement platforms that cannot be easily copied.

C-level leaders should treat digital IP as they do underwriting expertise: a defensible asset that compounds over time. Those who simply replicate benchmarks will struggle to differentiate in a commoditized digital market.

Actionable Risks on the Executive Radar

The report’s risk matrix underscores where executives should focus governance and investment discipline:

AI Overreach: Unchecked rollouts risk reputational damage and regulatory backlash.
Functionality Gaps: With 50% maturity, customer dissatisfaction is inevitable unless servicing accelerates.
Cultural Resistance: Lack of reskilling and empathy risks disengagement during AI adoption.
Legacy Drag: Without composable platforms, personalization and ecosystem integration stall.
Distribution Disruption: Insurers absent from embedded retail or travel ecosystems risk invisibility in buying flows.

Each of these risks is not theoretical — they represent high-likelihood scenarios shaping competitive advantage.

Executive Playbook: What to Do Now

From the data and case examples, five imperatives emerge:

Close functionality gaps fast — claims, cancellations, and servicing are the frontline of loyalty.
Scale AI responsibly — move beyond pilots, embed governance, and prioritize customer-facing use cases.
Invest in cultural readiness — reskill, foster experimentation, and lead empathy-driven adoption.
Modernize cores with composable architecture — enable agility, personalization, and ecosystem readiness.
Treat digital IP as strategy — develop proprietary assets that reinforce competitive differentiation.

Conclusion

Digital insurance is no longer about “catching up.” It is about choosing which future to lead. Deloitte’s Digital Insurance Maturity 2025 shows that leaders are not just digitizing existing processes — they are reshaping insurance into seamless, embedded, human-digital ecosystems.

For executives, the window for decisive action is narrowing. Those who build AI-ready cultures, invest in composable platforms, and seize innovation spaces will define the next decade of insurance. Those who delay risk irrelevance — not just to competitors, but to customers who now benchmark insurers against the best digital experiences in the world.