The Digital Innovation Survey links digital innovation to growth—but reduced margins are a concern.
We drew six main conclusions from this Digital Innovation Series, of which the first is that digital transformation features high on the agenda for the next five years. This is good news, because it shows that by far the majority of insurers believes that digital technologies are changing the sector’s fundamentals, and that digital transformation is a top agenda item.
The diagram below provides a little more granularity. Clearing insurers agree that the combination of changing customer expectations and new digital technologies will radically change their practices. However, only 75 percent expect a complete transformation of the value chain and a vast majority, 62 percent, still see existing insurers as their main competitors although new entrants GAFA and aggregators come closely behind and could potentially bring profound disruptions on the distribution side, a view consistent with the Accenture 2013 Consumer-Driven Innovation Survey: Playing to win.
A more sobering finding is the final one, showing that more than one-third (39 percent) anticipate that existing insurers will lose some margin as a result of digital technologies and the transparency they will bring.
The related fear of digital value destruction is certainly generating cautiousness when defining the appropriate pace and depth of change despite the vast opportunities in terms of digital value creation. I would argue that the possibility of margin reduction as regards existing business has to be offset against the new business that digital will enable.
Next time, I’ll continue to explore main conclusions.
For more information, download the full survey results of the Accenture Digital Innovation Survey 2014: Seizing the opportunities of digital transformation and explore the data using our data visualization tool.
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