The relationship between the digital maturity and efficiency of Croatian non life insurers: Exploratory research

Abstract

Aim/purpose – In line with the general trend of digitalization and changing customers’ needs and preferences, insurance companies have increasingly applied digital technology to their business. This digital transformation should enhance insurance companies’ efficiency and provide further advantages. Therefore, this study’s main aim is to analyze the current relationship between the digital maturity of Croatian non-life insurers and their efficiency. Design/methodology/approach – The empirical analysis is based on the data collected via an online survey on a sample of Croatian non-life insurers and from the insurance companies’ financial statements. The data was analyzed using the Digital Maturity Model 5.0 by Forrester Research, Inc., Data Envelopment Analysis, and correlation analysis. Findings – The surveyed Croatian non-life insurance companies have achieved the sec- ond level of a four-level digital maturity scale, on average. Although the digital trans- formation of insurance companies is a promising efficiency driver, the current level of digital maturity of Croatian non-life insurance companies is not positively related to their efficiency. Research implications/limitations – The research has implications for insurance com- panies regarding their path of digital transformation, as well as for the regulators estab- lishing an adequate regulatory framework to encourage the digital development of insurance companies. The objective limits of the research refer to the means of mea- suring digital maturity and the sample size. The research is limited to the Croatian insur- ance market. Originality/value/contribution – Analysis of the efficiency of insurance companies from the information technology perspective is rare in the academic literature, and this issue has not been investigated using a sample of Croatian insurers. The research con- tributes to advancing knowledge on the relationship between digital maturity and insur- ance companies’ efficiency.1 Keywords: digital transformation and maturity, efficiency, Croatian non-life insurance companies. JEL Classification: G22, C67, D22