Just like that, we’re several weeks into 2016. Last year, digital disruption and innovation caused many insurers to take pause. At the same time, it’s important to mind the nuts and bolts of our industry, like effective underwriting and sound risk management. Here’s a recap of some of the major topics we discussed on the blog in 2015.
The new insurance playing field
One of the big stories of 2015 was the threat to insurers’ traditional revenue streams by digital disruption and new competitors. On one hand, reduced risk pools, lower premiums and margin pressures may contribute to declines in profit and revenue. On the other, the opportunity to offer value-added or lifestyle services could enable insurers to increase premiums by 15–30 percent, and 25–50 percent in profits.
The Internet of Things (IoT)
Smart cars. Smart homes. Smart buildings. A major theme of last year was the Internet of Things and the implications for insurance. After all, when car manufacturers accept liability for autonomous cars, where does that leave personal lines insurers? If smart homes provide data to help prevent accidents or damage from happening, is it enough for insurers to merely indemnify risk? The IoT provides insurers with access to exponentially more data, with which they can better understand their customers, their associated risks and how to craft more relevant customer experiences.
Read Are you ready for the IoT? Part 1: Welcome to the Internet of Things
Read Are you ready for the IoT? Part 2: Three dimensions for disruption
Read Are you ready for the IoT? Part 3: Keys to success
Sitting at the intersection of the new insurance playing field and the IoT is the need for insurers to look beyond the traditional limits of insurance. By shifting up the value chain from traditional insurers to risk managers to everyday advisors, insurers can not only provide more value to their customers, but also benefit their own profitability and longevity. One key to success? Customer centricity.
Next week, I’ll have a look at some of the Accenture thought leadership that resonated with our blog readers.