Other parts of this series:
- 2018 insurance innovation leaders – Efma-Accenture Awards (and a $375 billion opportunity)
- Fast, simple, smart – my top picks from the 2018 Efma-Accenture Innovation in Insurance Awards
- IoT and connected insurance innovation – the best of the 2018 Efma-Accenture Awards
- 2018 Efma-Accenture Awards innovators – how they do it
- $375 billion in new insurance revenue up for grabs—if you are a ‘living’ business
Entrants to, and winners of the 2018 Efma-Accenture Innovation in Insurance Awards display many of the characteristics of ‘living’ businesses. So, what does it take to become a ‘living’ businesses?
Accenture’s Insurance as a Living Business report estimates that there is $375 billion in new insurance revenue up for grabs by innovation leaders to 2022. But to take advantage of these emerging opportunities, insurers need to become ‘living’ businesses—customer-centric, hyper-relevant, agile, vital, and innovative.
Where are the growth areas for new revenues and how can insurers realize the vision of becoming a living business?
Areas of potential new revenue growth
The Insurance as a Living Business report estimates new revenue potential in the following growth areas.
Source: Accenture’s Insurance as a Living Business report.
- Segments that are difficult to reach profitably with traditional methods are proving more accessible. New channels such as online and mobile are maturing, and technologies such as analytics, geo-location, and chatbots are enhancing insurers’ effectiveness. Examples include the use of a direct business model for the micro and small commercial market, and simplified underwriting and instant issue.
- New risks have emerged as a result of technological and other innovations. They present opportunities for new insurance offerings. Examples include cyber insurance, increased longevity risk, new commercial exposures in motor insurance, and insurance for the freelance/gig economy.
- Relationships with non-traditional intermediaries and ecosystems enable insurers to engage differently with customers and discover new sources of value for them – and new revenue for the business. Examples include partnerships with insurtechs, GAFA, car manufacturers, payroll, and wellness companies.
- Monetization of “the new” in ecosystems will see insurers offer their assets—from data to customer insights, platforms and models as services, risk algorithms, and digital identity verification—to ecosystem partners and other players who can benefit from them.
- Value-added services or products, including advisory services, will help customers reduce their risks. Often enabled by the Internet of Things, these personalized services will allow insurers to position themselves more positively, increase the frequency and value of their customer engagement, and generate revenue at the same time as lowering the incidence of claims. Examples of such solutions include wearables to help aging relatives stay at home longer, and selling connected-home devices and home security services.
The opportunity is immense. So how can insurers build the capabilities needed to access these opportunities?
While the focus of most discussions about the future of insurance is on new technologies, capabilities, and offerings, insurers that neglect their core business will find it hard to transform into living businesses. An important aspect of this journey is the digitization and optimization of legacy.
Realize the vision of a ‘living’ business
To become a living business, Accenture’s experience in working with many leading insurers has taught us these companies need to excel in five key areas:
For a more detailed insight into the transformation journey and areas of opportunity and potential revenue growth, read our Insurance as a Living Business report.
I hope you have enjoyed this blog series. There are many more innovation entries to the Awards that are well worth investigating. To access this information, register at efma.com (it’s free) and go explore the future of insurance.
My team and I are investigating—and developing—connected and IoT solutions with leading insurance companies at present. We welcome your inputs on this topic. Please contact me if you wish to discuss the opportunities for your business.