Growing customer demand for “living services” will prompt insurers to team up with partners that enable them to deliver across digital ecosystems. Finding suitable partners will be essential.
Insurers are fast-realizing that old-style relationships with customers are not going to succeed in the new digital economy. Consumers increasingly want their insurance providers to give them flexible, personalized, digitally-enabled products and services that meet a broader range of needs, often at a higher level. We call these “living services”.
To meet these expectations carriers must not only ramp up their investment in technology and skills. They must also forge strategic partnerships that will be vital to their long-term future.
These partnerships, and the ecosystems they enable, are becoming essential for delivering a broad range of related offerings. Many insurers have already established their own ecosystems and have begun engaging with their customers in these digital environments.
Insurers need to consider carefully who they are going to invite onto their ecosystems. And also, what role they should play within ecosystems run by other companies. These are not easy choices. They will require carriers to move away from traditional product and business silos, share their customers with other companies, maybe relinquish part of their distribution function, possibly team up with rivals in the insurance industry, and enter relations with businesses in other markets. That’s a tall order.
Selecting the right partner is essential. Insurers should look for companies that complement their own capabilities. Their ecosystems should provide products that could be bundled with insurance offerings. The ecosystems could attract large numbers of consumers who are not yet insured. Alternatively, prospective partners could supply products and services that would enhance the quality of insurers’ ecosystems or increase their credibility with consumers.
Most insurers have gaps in their product range or technical capabilities that could be addressed through effective ecosystem partnerships. These gaps are likely to increase as many insurance offerings become more focused and changes in technology accelerate.
There’s no doubt that meeting customer expectations will become increasingly important. Carriers won’t be able to meet this challenge on their own. The partners they choose, and the work they do together, will go a long way to determining whether they are successful.
You can find the full survey report here. Below are some other links that provide information about digital transformation that you might find helpful: