Digitalization of Insurance Sector: Issues and Challenges in Western Balkan States

Armanda Tola – Epoka University, Faculty of Economy and Administrative Sciences, Rinas, 1000 Tirana, Albania

Abstract: The digital transformation has increased its relevance for insurance companies in recent years, as one of the main drivers of insurance market de­velopment. As with any revolution, it comes with opportunities and challeng­es, especially for the information technology departments to increase the ef­fectiveness of business processes. This paper aims to provide a comprehen­sive overview of digital technologies and their capacity implemented in the in­surance industry in some of the Western Balkan states Albania, Kosovo*, and North Macedonia. The data was collected from a survey initiated by Deloitte in Poland called “Insurtech 2022 Survey” which was distributed to some se­lected Central European states, to identify industry trends and examine the needs of insurers and capabilities of Insurtech companies. This study uses re­sults from primary data gathered from this survey which was delivered to all non-life insurance companies in Albania, Kosovo*, and North Macedonia and was answered by more than 70% of them. The aim was to examine the in­dustry trends and determine both the needs of insurers and the capabilities of the insurance industry. The paper discusses Insurtech tools implemented in these business processes, evaluates the effectiveness of their use, and identi­fies the associated risks. The conclusion revealed that North Macedonia has spent and plans to spend more than the other is the most significant study with Insurtech companies, in positive line with the volumes of gross annual premiums. The paper also discusses Insurtech tools implemented in non-life insurance companies, assesses the effectiveness of their use, and identifies the associated risks. The results illustrate three major tasks the industry is facing: the risk of unauthorized access or cybersecurity is the most significant risk ac­cording to the respondents, followed by the challenges of improving the cus­tomer experience, and business processes, offering new products, and prepar­ing for competition with other industries. Moreover, key areas of adaptation according to this study are identified such as the effect of information asym­metry and risk assessment, and the implications of new technologies. The re­sults emphasize the importance of a holistic digital strategy to be implement­ed in the future in all these states.

8th International Scientific Conference – EMAN 2024 – Economics and Management: How to Cope With Disrupted Times, Rome, Italy, March 21, 2024, CONFERENCE PROCEEDINGS, published by: Association of Economists and Managers of the Balkans, Belgrade, Serbia; ISBN 978-86-80194-83-7, ISSN 2683-4510, DOI: https://doi.org/10.31410/EMAN.2024

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-Non-Commercial 4.0 License (https://creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of the work without further permission. 

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