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Digitalization has infected us all

By Sven Krüger, CEO Eucon Group

Digitalization has infected us all

Just a few weeks ago, hardly anyone would have believed that a pandemic could trigger a digitalization boom in Germany, which would not have occurred at this pace under normal conditions. But suddenly everything is digital, remote and contactless. Working, learning, shopping, sports, research – virtually overnight, all this is now being supported by digital technologies in order to contain the spread of the coronavirus.

Even the invisible paths of transmission can be traced through apps. The positive trend is undeniable: the infection curve is flattening and Germany is making friends with data and technology-based day-to-day routines as quickly as never before.

The current surge in digitalization is turning upside down the habits that are deeply rooted in our collective consciousness. The virus has already pushed aside the long-held reluctance towards digital payment processes in a country where consumers have been more attached to cash than anywhere else. In the workplace, almost everyone is now aware of the benefits of Microsoft 365, Teams, Zoom or Slack – tools that enable employees to network productively from their home offices.

In many places, office rents are already predicted to fall, because many employers consider working from home to be surprisingly smooth and effective. And in the manufacturing industry, too, the pandemic has put digitalization high on the agenda. Industrial manufacturers are learning that digitalization can maintain their operational capability and helps to substitute human routine work through automation. They are now discovering that their degree of digitalization is a competitive edge.

Last but not least, the digital interaction between companies and their customers has been massively overhauled and further developed in almost every industry in recent weeks. For one, because many companies were only able to remain operational through digital means, and for another because customer expectations regarding speed of response, user-friendliness and customization of services have increased. In the current situation, they are demanding what they have so far received from digital pioneers such as Amazon – namely integrated digital processes, business models and customer journeys geared to their needs – across all areas of life.

COVID-19 reveals the need for digital action

This is also reflected not least in the insurance industry, where the online portals of some enterprises are currently recording twice as many registrations as before the pandemic. A recent survey by Ernst & Young and V.E.R.S. Leipzig, for instance, revealed that digital sales channels and customer interfaces are becoming increasingly important in the insurance sector.

The pandemic is likely to significantly drive the digital companies’ transformation. This trend will also be amplified as consumers are forced to use digital channels for everyday transactions. Therefore, customer preferences are changing faster than ever before, as indicated by the conclusions of the recently published 2020 World Insurance Report by Capgemini and Efma.

Artificial intelligence as driver of digital transformation

In a survey among executives of banks and insurers conducted by PwC, 97 per cent of respondents said that AI will be a key driver of innovation. Machine learning and advanced data analytics will help improve the quality of processes and the customer experience. In the insurance industry of the future, companies will thrive that seamlessly combine AI and analytics with human expertise and decision-making, and use real-time data to deliver processes and business models customized to the individual needs of their customers.

The pandemic has made one thing particularly evident: there are virtually no digitalization-skeptical industries in Germany anymore. The German digital economy is growing, because companies have been compelled to opt for the comprehensive digitalization of their processes and business models.

First published in Versicherungswirtschaft heute (German), 26th May 2020

Written by Eucon Group