Uncovering the Impact of Digitalization on the Performance of Insurance Distribution

Abstract

This study explores the impact of digitalization on the performance of insurance intermediaries, who still play a key role in the revenue generation of insurance companies. By using an interdisciplinary approach, this study is the first to examine the extent and type of digital technologies used by intermediaries, their impact on performance with respect to revenue, productivity, and interaction with clients, and the role of digital stress in this context. The research is exploratory, which is why a research model with many variables and relationships between them was built. The quantitative multivariate method of Partial Least Squares Structural Equation Modeling (PLS-SEM) was applied as it allows the simultaneous estimation of models with multiple dependent variables and their interconnections. In this context, data collected in 2022 from 671 insurance intermediaries from Germany, whose demographic distribution in the sample is representative of the German insurance market, were analyzed. The findings show that insurance intermediaries use many digital technologies compared to other industries, particularly those that create added value in their daily work. Empirical evidence also showed that using digital technologies positively affects performance but induces perceived digital stress. As this study reveals, the latter diminishes the positive effects on performance. Technology optimism, technological skills, and organizational support reduce the severity of stress. This means that insurers can start here to support intermediaries to mitigate the performance-limiting effects. This study adds to the insurance literature by providing a broader understanding of how insurance intermediaries deal with digitalization and what it means for their performance.