Other parts of this series:
- How ecosystem power plays are transforming the future of insurance
- Why Ping An Insurance is on the verge of becoming China’s largest open Internet finance platform
- A winning insurance ecosystem: Tune Protect Malaysia and AirAsia
- Unleash the Power of Us: What insurers can do to unlock the next waves of growth
Insurers agree that the strength of their organizations lies in the partners and ecosystems they choose.
Recent studies in insurance transformation have shown what we now know to be true: no insurance company is an island, and you’re only as strong as your digital ecosystems.
In this blog series I’ll explore one of the five major trends that emerged from Accenture’s Technology Vision for Insurance 2017: the transformative impact ecosystem power plays will have on the future of insurance.
The report revealed that in a booming digital landscape, the future success of insurance companies will be determined by their strategic partnerships with third-party platforms. The success of platform-based companies like Uber and Airbnb has already paved the way to the emerging digital landscape of the future, showing the importance of making the customer experience as easy and convenient as possible—in their case by presenting the customer with a single point of access.
How are ecosystem power plays already affecting insurance companies? Of the 563 insurance executives from around the world that participated in the 2017 survey, an overwhelming 75 percent agreed that digital ecosystems are having a noticeable or transformative effect on the insurance sector. They can see the radical change unorthodox partnerships have had on various industries across the globe. Take for example General Motors, which last year invested $500 million into rideshare platform Lyft. The Express Drive Service was born, allowing Lyft drivers to get into the market by renting their cars directly from GM.
In addition, 33 percent of insurance executives said they are taking aggressive steps to participate in digital ecosystems, while 94 percent agreed that adopting a platform-based business model and engaging in ecosystems with digital partners are critical to their success.
They recognize that by building their digital ecosystems they gain rapid access to new pools of customers. It also allows them to take advantage of the strengths of their new partners, such as a more exciting brand or greater customer-centricity. Forward-thinking carriers are seeing this as an opportunity, and strengthening their future roles by, for example, making application programming interfaces (APIs) a key part of growing their brand.
Another example of a platform-based business model is the recently announced partnership between AXA, Alibaba and Ant Financial Services, which will explore the distribution of insurance and financial services products through Alibaba’s e-commerce platform.
The challenge for insurers is to create new and innovative business models that put their brand at the forefront of the digital ecosystem. Ultimately, it’s about making your customer experience better, by pooling your skills with those of external platforms. Seventy-six percent of insurers said that they cannot gain a competitive advantage by going it alone – their strength lies in the partners and ecosystems they choose. So insurers are well advised to choose their digital platforms wisely, with their eyes on the future.
In my next blog post I’ll take a closer look at Ping An as a case study in ecosystem power plays. To read more about the topic and the five trends identified by Accenture, download the Accenture Technology Vision for Insurance 2017 or our white paper Evolve to Thrive in the Emerging Insurance Ecosystem.