Other parts of this series:
Discover the three levers insurers need to focus on to increase their market penetration and tap into a $375 billion revenue potential.
Our recent [marketo-rtp-id id=”rtp-form-id” image=”” description=”” title=”Insurance as a Living Business” registration_page_link=”https://financialservices.accenture.com/accenture-living-business-rp.html”] research identified a huge $375 billion revenue opportunity for insurance companies able to transform themselves into living businesses over the next five years. Of this $375 billion, we project $177 billion to come from new sources of revenue and the remaining $198 billion to come from gains in market share.
We can further divide this potential for growth across five revenue streams:
- Increased penetration of existing market segments that are difficult to reach profitably with traditional methods.
- New risks that have emerged as a result of technological and other innovation, and that present opportunities for new insurance offerings.
- Relationships with non-traditional intermediaries and ecosystems (such as GAFAs) that enable insurers to engage differently with customers and discover new sources of value for them.
- Monetization of “the new,” where insurers offer their assets to ecosystem partners and other players who can benefit from them.
- Value-added services or products including advisory services that help customers reduce their risks.
Over the next few weeks, I’ll explore the top three of these revenue growth areas—increased market penetration, new emerging risks, and relationships with ecosystems and intermediaries—and highlight the key transformations required in order to capture this revenue potential.
As we can see from the chart, the greatest potential for revenue growth—$144 billion—is in the area of increased market penetration.
Small commercial is a prime example of a line of insurance business that could see significant growth in this area. It can be a challenging market to serve profitably with traditional distribution partners. But by adopting new digital technologies to simplify products and business processes, carriers could improve their market penetration substantially.
However, keep in mind that the use of digital has to be balanced with the needs of small business owners, who seek advice and counsel about whether their choices will provide them adequate protection. Carriers working with small businesses should focus on three levers to develop living business capabilities:
- Design thinking. To serve small business owner needs, a simplified, engaging experience with appropriate education tools is paramount. This digital experience requires logical, integrated off-ramps into other channels for support and counsel. It cannot just be a pretty front-end that quotes and sells policies. Downstream processes and a re-invented core set of operational processes must feel like a natural extension to a digital quoting and binding experience.
- Building/iterating. Carriers must re-think how digital experiences are developed and delivered. They must build agile teams to iterate quickly and ground their ventures in co-creative efforts with small business and distribution partners. The days of building solutions once and running them are over. Constant innovation and development are in order.
- Connecting. Carriers should take a hard look at how small businesses think about insurance and what space in their lives it occupies. Does it really need to be on a carrier platform? We’ll explore this further later when we examine the third revenue stream—new relationships—in detail.
While the future may be uncertain for today’s insurance carriers, I believe there’s a tremendous opportunity for carriers that can pivot to becoming a living business. As part of Accenture’s Insurance practice, I’m here to help carriers navigate this future in a fearless way. If you’d like to talk about how your organization could take advantage of the potential for revenue growth by increasing your market penetration, don’t hesitate to reach out to me directly.
In my next post, I’ll look at the area with the next biggest potential for revenue growth—new emerging risks.
In the meantime, if you’d like to learn more about our research, register to read the report: Insurance as a Living Business: Explosive Growth.
[marketo-rtp-id id=”rtp-form-id” image=”https://insuranceblog.accenture.com/wp-content/uploads/2018/04/Insurance_Living_Business_Explosive_Growth-2.jpg” description=”Insurers need to think in terms of becoming a “Living Business” that provides services designed for the changing needs of the user.” title=”Insurance as a Living Business: Explosive Growth” registration_page_link=”https://financialservices.accenture.com/accenture-living-business-rp.html”]