A shift is underway in the insurance industry. Rapid, disruptive change is putting pressure on traditional sales and distribution models. Insurers have an opportunity to proactively position themselves as disruptors rather than trying to defend their legacy business and distribution models.

Accenture polled more than 400 senior executives at large and medium-sized life, P&C (both personal lines and small commercial) and multiline carriers in 20 countries. It found that insurance companies are accelerating the shift to a radically different distribution model, where digital plays an increasingly important role in the majority of interactions, and agents’ efforts are being refocused to add more value.

The survey findings are also in line with a major trend identified in the 2016 Accenture Technology Vision for Insurance report: Predictable disruption.

For example, pulling driving data from connected car platforms has enabled new services such as pay-per-mile insurance and variable pricing that challenge the industry status quo. With driverless cars becoming a reality within just a few short years, pay-per-mile is providing a glimpse into the imminent disruption of consumer transportation.

The disruption caused by these new digital ecosystems is not bound by traditional industry barriers. As every industry becomes digital, an ecosystem forming in one sector can rapidly become the foundation for disruptions in another.

As in any industry, there are a few insurance companies that have a clearly developed vision of the future of their business and are investing in their transformation to realize that vision. These carriers are the Digital Transformers, and they comprise 28 percent of our Accenture Distribution and Agency Management survey sample.

These front-runners show an appreciation of the disruption confronting the industry and the opportunities it presents. They are well ahead in deciding on their course of action and embarking on the first steps of their transformation. A good example is their response to the Internet of Things, where many have launched connected insurance initiatives or are planning to do so.

In the first four parts of this series, we looked at specific examples of how some Asia-Pacific insurers are paving the way and what the industry as whole can gain from their experiences.

Insurers can follow the Digital Transformers’ lead in six key issues

  • Commit to your chosen business and distribution models, moving beyond a succession of pilots
  • Proactively define your position in new ecosystems, cooperation models and partnerships
  • Move from indemnification to real-time protection
  • Make innovation and customer-centricity the cornerstones of your distribution strategies
  • Strive for simplicity of access, transactions and offerings
  • Focus agents on advice, value-add and deeper customer relationships

The pace at which insurance distribution is transforming is accelerating. New competitors with novel offerings, and a steady flow of technological innovations, are reshaping customers’ expectations and changing the traditional insurance landscape. To remain viable, insurers too must change.

Some carriers are responding with conviction. Others are more tentative, hoping the wise course of action will become obvious in time. Many are reacting to the disruption by seeking to defend their legacy business and distribution models. Their more successful peers are becoming disruptors in their own right.

To learn more, register to download the Technology Vision for Insurance 2016.

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