In 2014, the US insurance industry wrote net premiums of more than $1 trillion. That’s good news—but in the face of increasing commoditization, new competition and shifting risk pools, it’s not enough for insurers to invest exclusively in their current business models. To succeed in the future, they must also reposition themselves and pursue growth options to move beyond insurance. Let’s dig deeper with this Insurance Chart of the Week.
Evolve business models to move beyond insurance
One crucial area for growth within a new business model is for insurers to shift from insurers of risk, to becoming trusted advisors. As shown in the chart above, there are three levels to this transformation:
- Traditional insurers learn how to use digital to their advantage: to optimize existing processes, tailor products and services to offer omni-channel customer experiences, and support agents in offering differentiated service.
- Risk managers are enabled by data, and are able to capture, own and monetize it, as well as to offer integrated advice through digital and face-to-face channels. Risk managers may find themselves as a hub or concierge for risk management services, aligning with new entrants (think: Google) or companies with related offerings, such as lifestyle partners.
- The everyday advisor is where the real value lies. This is where personal data, privacy and the Internet of Things coalesce to enable insurers to monetize, innovate and proactively advise their customers on a regular basis. This is an insurer that doesn’t just underwrite risks, but helps assure good quality of life.
You’ll notice, as well, that there are two crucial levers as insurers climb this ladder toward becoming an everyday advisor. First, they must shift from being company-centric to customer-centric. Second, they must continually strive to meet more of their customer needs.
Finally, as insurers become embedded in their customers’ lives—becoming, if you will, “life coaches” to individuals or advisors to corporations—they must consider the implications for the claims function. As advisors enabled by real-time, personalized data, insurers will likely be able to help mitigate or prevent claims from happening in the first place. Claims leaders will need to assess how they can adapt to this shift, and how they can contribute to the overall well-being of their customers in the future.
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- View the archive of Insurance Chart of the Week posts and videos.
- Email me to discuss how Accenture can help you evolve your business models to move beyond insurance.