Is Demand for Technologies Determined by Production Costs? The Case of Insurance Companies

The article is a part of a global discussion about the influence of technologies on the insurance industry. For a long time, the insurance industry was known as a restrictive market with high barriers to innovations. The rapid development of Industry 4.0 puts insurers under pressure to implement new information and communication technologies into business processes to be competitive and to satisfy customers’ expectations. Due to this, one of the main reasons for the demand for technologies is the reduction in the cost of the insurance production process. This study intends to answer the question about how production costs determine the demand for technologies among insurers. To answer this question, the research presents a case analysis of three major European insurance groups in the period 2008-2018. The analysis of the main production cost indicators (acquisition, claims handling and wages) and expenditures on information technologies in the insurance companies make the paper original. The research shows that there are no clear relations between the raising of direct insurance production costs and the demand for information technologies among insurers. This research contributes to the study of the development of information technologies in the insurance industry. Technologies still do not play a key role in the efficiency growth of insurance companies. It is mostly a sporadic factor.