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Life insurance providers keen to deliver connected wellness services need to make big changes to how they conduct business.

Life insurers looking to capitalize on the huge potential of connected wellness need to do much more than simply encourage their customers to hook up to digital devices. They have to put digital ecosystems at the heart of their businesses. This requires big changes to how carriers structure their organizations and to how they engage with customers and deliver products.

The importance of digital ecosystems is widely recognized among major insurers. Ninety-four percent of the carriers we surveyed around the world believe that adopting a platform-based business model and engaging in ecosystems with digital partners is critical to their success. Around 74 percent of insurers said digital ecosystems are changing how their industry delivers value.

However, many life insurers have been slow to take advantage of the opportunities that ecosystems offer. One of their biggest obstacles is the substantial strategic and structural changes they need to implement to capitalize on this innovation. A further challenge is the plethora of goal-setting and activity-tracking mobile apps that have emerged in the past few months. Often, it’s difficult for life insurers to know how to harness the potential of digital ecosystems and where to find suitable partners to venture into the connected wellness market.

The value proposition of ecosystem insurers is substantially different from that of conventional providers of life insurance. Digital platforms enable carriers to reach customers and deliver their offerings far more effectively than in the past. They can embed products and services across a host of interlinked digital environments. This allows life insurers to take advantage of the “multiplier effect” of such technology. They can scale up connected wellness programs without making investments outside their core businesses. They can also gain quick access to additional customers without incurring extra marketing costs.

Third-party platform partners are an essential component of successful digital ecosystems. By integrating their core systems with those of their platform partners, carriers can extend substantially the reach and effectiveness of their digital offerings. They can also draw on their partners to source incentives and rewards for their wellness programs. Such inducements encourage and sustain long-term changes in customer behavior.

Some insurers may opt to go beyond eco-system partnerships and also invest in specialist companies that can enhance their core competencies and digital assets. For example, Allianz, through its Allianz X investment unit, recently invested in telehealth platform American Well while AXA acquired Maestro Health, a digital benefits-administration firm in the US.

To launch connected wellness services, and put digital ecosystems at the core of their businesses, life insurers need to take these key steps:

• Crystallize a connected wellness value proposition. Select target markets, identify critical points of customer interaction and then marshal the required capabilities.
• Lay the groundwork for innovation. Establish a flexible operating model, pool skills and expertise and scale at market speed.
• Manage, monitor and monetize data flow. Use data to create more customer interaction points, enhance risk selection among applicants and build dynamic customer profiles.
• Enhance existing healthcare-provider networks with new digital and telemedicine assets.
• Share rewards across ecosystem partners. Adopt a collaborative culture and consider spreading the savings from lower acquisition costs among other members of the wellness ecosystem.

For further information about connected wellness and the opportunities this technology offers life insurers, take a look at some of these links.

Connected Wellness: Livening-up Life Insurance.

Seniors want their Digital Health, too.

Evolve to Thrive in the Emerging Insurance Ecosystem.