As insurers examine their business models for ways to invent and deliver trusted advisory services, they will need to launch new solutions that address customer needs—and these new solutions won’t come from the same old thinking. Instead, insurers need to make space and create systems to make disruptive innovation a safe reality. Learn more in this Insurance Chart of the Week.

A roadmap for diversifying business models

Beyond insurance - diversifying business models to move beyond insurance
Click the image above for a large version of the Insurance Chart of the Week (opens in a new window).

The chart shows that there are two levers to drive growth: insurers can move vertically with new offerings, or horizontally to serve new customers.

To begin, they can launch solutions that improve upon or optimize existing offerings for existing customers. Doing so can create incremental change—but in the long run, will not position insurers for long-term success.

Instead, the key to growth lies in the evolutionary stage, whereby insurers can expand with new offerings, or extend their current offerings to new customers. In this space, they can evolve their business model by offering aligned products or services. For example, as the Internet of Things continues to grow, insurers have opportunities to align with complementary companies and help customers mitigate and manage risk—not  just insure it.

Finally, where insurers are able to expand with new offerings to new customers, they can achieve exponential growth. This is new market territory that requires insurers to think like customers and address a steadily increasing part of their customers’ daily needs through new ecosystems of services. Partnerships with technology companies or other innovators can help accelerate growth, as well.

This path to growth has important implications for the claims function. As they become more embedded in customers’ day-to-day lives, insurers may write different kinds of risks than they do today—and claims leaders must be prepared to manage these risks and advise the rest of the business on the implications of doing so.

To learn more about how to evolve and diversify business models to move beyond insurance, register to download Beyond Insurance: Embracing innovation to monetize disruption.  Among other insights, it shares three steps insurers can take today to make the leap to new growth, and five ways to enable an environment for innovation.

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