The impact of digitalization and marketing spending volatility on the financial performance indicators of insurance companies in the global financial services market

Abstract

Purposes. The purpose of this study is to examine how digitalization and volatility of marketing spending influence the financial performance of insurance companies in the global financial services market. The research aims to assess the link between investments in digital technologies and key profitability indicators, while identifying the modifying role of marketing expenditure dynamics. Methodology. The study is based on quantitative analysis using panel data of major international insurance companies over several years. Return on assets (ROA) and return on equity (ROE) are selected as dependent financial indicators. Independent variables include IT investment growth, the volatility of marketing expenses, and control variables reflecting company size and market features. Econometric modelling is used to identify both direct and lagged effects of digital investment, as well as interactive effects between digitalization and marketing volatility. Findings. The results indicate that the direct short-term effect of digital investment on profitability is weak or neutral, mainly due to delayed returns and high implementation costs. However, positive effects become significant over time, particularly for ROA. The study further confirms that volatility of marketing spending modifies these relationships: companies with stable and strategically aligned marketing expenditures demonstrate stronger financial gains from digitalization, while high volatility weakens long-term financial outcomes. Originality. The originality of the study lies in empirically conceptualizing marketing spending volatility as a mediating factor influencing the effectiveness of digital transformation. Unlike existing studies that evaluate digitalization in isolation, this research integrates financial dynamics with marketing‐driven behavioral effects, offering a new explanatory mechanism for divergent financial performance among insurers.