Let’s face facts: While we may delude ourselves in thinking clever commercials and animated mascots make us relevant, insurance isn’t something that people view as a positive part of their daily lives.
Mandated auto and homeowners’ insurance makes the buying process yet another expense, like paying your gas, water and electricity bills. But unlike these commodities, insurance isn’t something that has any near-term gratification, or a positive impact on one’s daily life. Consumers primarily interact with their insurers when they’re paying premiums or filing a claim – which is sometimes denied. Either way, insurance is just another expense, a necessary evil, with generations of negative connotations built directly into the customer touch points.
Given that reality, it’s surprising that our industry becomes indignant when Walmart begins selling auto coverage online, or when Google and Amazon start making noises about getting into the life insurance business.
Instead of expending energy racing these firms to the bottom of the commodity bin, insurers should evaluate their existing business models and decide if there are other roles they want to play – as a passive insurer, or one who identifies new risk pools and makes innovation a safe reality. And the true innovators will break away from the pack not by doing the same thing in a different way, but by repositioning themselves to move beyond insurance to serve customers and embrace their role in society.
Accenture’s Digital Innovation Survey looked closely at what we call Digital Transformers – insurers that are thinking beyond insurance – and what they are doing differently from their competitors. These companies are leveraging technology, analytics and innovative partnerships to better serve the modern consumer. They are taking a broader view of their customers’ needs than just insurance.
But “going beyond insurance” is unlikely to be successful within an insurer’s existing four walls. The risk-averse culture, the large-scale governance, the time-consuming processes can hobble even the most innovative plans.
That’s why insurers serious about transformation are launching “red teams,” separate entities whose reason for existence is to detect risk pools and new needs, and develop new services – based on insight and input from customers. These emerging risk pools will represent new sources of value for them.
Unencumbered by traditional thinking, a red team can explore new offerings and risk pools to serve customers – whether it’s offering skydivers a two-hour life insurance policy purchased via SMS on a mobile phone, or creating an ecosystem of specialist providers to develop a senior-citizen monitoring service to more broadly address the need to live with dignity.
It was that sort of disruptive thinking that happened 300 years ago in Lloyd’s Coffee House when a group of British merchants and entrepreneurs created an ecosystem to protect their shipping interests. Today we’d call them Digital Transformers!
In my next blog I’ll take a look at the risks inherent in the Internet of Things – and how insurance can play a practical role while starting to establish moral and ethical bounds to protect consumers’ interests.
Read more on this topic by downloading the Beyond insurance: Embracing innovation to monetize disruption report.