Other parts of this series:
Want to transform your insurance organization into a living business? Discover which key traits you need to develop.
In today’s insurance market, disruption is causing costs to rise, and it’s seen as suppressing growth and profitability. But at Accenture, we calculate that disruption could also create an opportunity for revenue growth worth as much as $375 billion over the next five years for insurers willing and able to respond.
However, even though the potential for growth from increased market share augmented by new and expanded revenue streams is real, significant and already available, for many carriers it will remain out of reach. Why?
- Their focus on products makes it difficult for them to keep in touch with customers’ changeable, rising expectations.
- Their rigid operating models constrain their options and prolong their response times.
- Their preference for going to market alone means that potential ecosystem partners are more likely to become rivals than allies.
The answer, we believe, is to become a “living business”—a business that is perpetually hyper-relevant, agile and innovative, and that embraces and becomes expert at change.
What is a living business?
A living business has a profound and dynamic understanding of its customers, based on a sophisticated data and analytics capability as well as an authentic receptiveness to what customers tell them. They also have the ability to convert this insight into meaningful, timely actions. Whereas traditional insurers are often late to learn about changing customer needs, living businesses sync their interactions with key moments in the customer’s life.
Living businesses have more fluid models that let them evolve at the same rate as their partners and customers. Modern platforms and motivated talent enable them to create compelling new value propositions. They look beyond insurance to find new sources of value for customers and new reasons to engage meaningfully with them on a more frequent basis. They strive for flexibility, adaptability and simplicity, rather than worrying about “being right” 100 percent of the time.
What’s in it for insurers?
Insurers that become living businesses should look beyond the traditions of the industry for inspiration. Instead of being threatened by GAFAs (Google, Amazon, Facebook and Apple, and other large online platform businesses), they should seek to emulate the secrets of their success. And partner with them to reinforce their brand, reach new customer segments and become part of a larger, more dynamic portfolio of platforms, products and services.
Living businesses thrive within multiple ecosystems. While it’s important that insurers identify and reinforce what is unique to them, in order to defend against insurtechs and other emerging rivals, they should also strive to become more open, receptive and collaborative. This shift in mindset is important because it helps the organization appreciate the significance of its customers, partners and employees, whose commitment to a shared, new and constantly evolving role is indispensable. It enables the organization to re-envision its personality and empowers its people to take risks and innovate fearlessly.
Key traits in the personality of a living business
Living businesses are intelligent, dynamic, credible and engaging. This gives them a differentiated, purposeful personality that is significantly more likely to appeal to consumers. And because they are authentic and supported by appropriate skills, they can respond more effectively to their customers.
Key attributes include being:
- Engaging. This means “being there” for customers and commercial clients, a trusted, relevant and empathetic ally as they navigate the uncertainties of their lives and businesses. To achieve this, insurers need to look ahead and proactively offer advice and services that are timely and useful.
- Intelligently personalized. By understanding and anticipating customers’ and businesses’ needs, and having the ability to change products and platform features to meet these needs, living businesses can deliver relevant, context-matched offerings at scale.
- Credible. Like many financial service providers, insurers have a trust deficit to address. More than just putting the customer at the center of the business, living businesses demonstrate their commitment at every moment of truth, across every channel and end-to-end in the value chain. This includes responding to feedback, participating in social conversations and ensuring employees “live” the brand values at all times.
- Consistent. Delivery of the same branded experience anytime, everywhere, across all channels and devices is challenging but essential. It means ensuring that the actions of ecosystem partners reinforce rather than undermine the brand.
- Generous. Insurers will not be regarded as the customer’s ally if they are seen to willingly accept regular premium payments but then dig in their heels whenever a claim is submitted. Inexpensive gestures or services offered to customers at no cost, simply to reward them for their loyalty, will help to diminish the “me vs. them” mentality.
Living businesses have a personality that is empowering, both for employees and the people they serve. I believe that insurers who choose this path can thrive.
In my next post, I’ll look at opportunities that are ripe for insurers across all lines of business.
To learn more, read “Insurance as a Living Business: Explosive Growth”