Other parts of this series:
- Insurers must find new distribution models to satisfy increasingly demanding customers
- Six new insurance distribution models are emerging as carriers seek to harness the huge potential of digital technology
- Big insurers are moving to omni-channel distribution channels to leverage their reach and scale in the digital economy
- Nimble insurers target digital-only customers with a single direct distribution channel
- Connected insurance offers carriers big opportunities to improve their distribution and broaden their products
- Hyper-personalization lets insurers get close to customers to deliver great experiences and additional products and services
Connected insurance is one of the fastest growing sectors of the personal lines business. The connected automotive, home, health and fitness markets are all expanding rapidly. Insurers need to decide swiftly how they’re going to deploy this technology.
During the past 12 months insurers throughout the world have launched a multitude of connected products and services that are interlinked over the Internet of Things. Our research shows that 45 percent of insurers believe this trend will be a major driver of revenue in the next three years. Nearly half the more than 300 property and casualty, as well as multiline, insurers we canvassed already have connected telematics solutions on the market or in development. Over a third of the more than 100 life insurers we interviewed offer their customers connected solutions, using wearables, or plan to do so.
Most carriers are no longer wrestling with the question of whether or not to develop a connected insurance offering. Their big challenge is how they’re going to deploy this technology and leverage digital and mobile channels to provide new value propositions and distribution options. They need to identify the best solutions for their customers, the most effective pricing, the correct platforms and devices, the right business and technology partners and the ideal mix of distribution channels.
Carriers who were quick spot the potential of connected insurance have already made inroads into the connected car market. Insurers such as Generali, Progressive, Allstate, Allianz, AXA and Direct Assurance have connected solutions that reward customers for driving well. By 2020 close to 98 percent of new vehicles are likely to be connected to insurers or other service providers. The connected vehicle market is fast becoming a global industry and insurers need to move quickly to secure the correct partners or risk being isolated.
The connected home market has also attracted several major multinational equipment and service providers. Google, Apple and Philips, for example, are leveraging their extensive presence in the entertainment market to deliver on-line security and safety products. The connected home market is expected to be worth US$235 billion this year. Allianz, AXA and Banca Intesa have introduced successful connected home solutions that go beyond insurance and offer threat prevention and safety alerts.
Regulatory requirements are likely to favor local insurers in the fast-growing connected health and fitness market. By next year there will be around 170 million portable health devices attached to people around the world. AXA, Harmonie Mutuelle, Generali, Arkea, Vitality and Tokio Marine have all launched connected solutions designed to improve the wellbeing of their customers.
Most, if not all, of these offerings are fully digital. They leverage the capabilities of analytics, mobile technology and social media channels to offer real-time protection rather than just indemnification.
The trend is very clear. The most successful connected insurers will develop a deep understanding of their customers’ behavior and attract the best eco-system partners to offer wholly-new digital value propositions. They’ll align their distribution models to the needs of these new connected offerings and employ their physical networks to provide customers with advice.
In my next blog post, the last in this series on new distribution models, I’ll discuss hyper-personalization and customer centricity. Until then, I recommend you have a look at our Distribution and Agency Management Survey. It’s available on this link: www.accenture.com/InsuranceDistributionSurvey.