Other parts of this series:
In the last five years, new players have started joining the ever-changing ecosystem of insurance distribution. Some have come from a brand new sector: Financial technology.
Accenture research shows approximately $5 billion has been invested in 196 insurance technology companies since the second quarter of 2011, with no less than $2.6 billion coming in 2015.
For the most part, these players aren’t interested in underwriting and taking on risk—it’s just too commoditized, requires too much capital, and is too heavily regulated. According to CB Insights and Accenture Analytics, 56 percent of the recipients of these investments are focused on the distribution part of the value chain.
Partnerships are key to their strategy. For example, AXA, the French multinational insurance firm, has significantly boosted its digital capabilities by forming a strategic partnership with Facebook. The deal gives AXA access to dedicated Facebook resources in innovation, analytics and mobile, thus furthering its ambition to become what the group’s COO calls “the leading digital and multi-access insurer.” Facebook, for its part, furthers its ambition to build major partnerships with international companies, and expands its footprint in the French market.
Yet many other carriers still hesitate to take bolder steps. Fewer than half (43 percent) are planning or have completed the acquisition of startups or innovative competitors, according to Accenture research.
For established insurers that are still unsure of where to find the right partners, there are innovation labs around the globe, helping connect digital entrepreneurs with leaders in the insurance industry.
Accenture’s fintech innovation labs in New York, Dublin, London and Hong Kong help form partnerships between insurers and innovators worldwide. More than 50 insurers and other financial institutions participate in the program globally, which helps identify and mentor the most promising fintech innovators. In a mere six years, 31 lab graduates conducted 107 pilots; raised close to $300 million in financing; and created more than 200 jobs.
To compete more effectively in an increasingly digital world, insurance leaders urgently need to form such partnerships. But attractive alliances are, by definition, limited in number. Leading players are already inking the best deals, leaving the laggards with fewer options. In short, now is the time to replace the “I” with the “we” in the new insurance distribution ecosystem.To learn more, register to read the report.