From Digitally Disrupted to Digital Disrupter
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Accenture’s Technology Vision is published every year. It’s something I always look forward to because it gives such a far-ranging view of where technology and business are headed. This year’s Technology Vision is no exception. It’s well worth a read—and watch this space for our forthcoming reworking of these trends with insurance specifically in mind.

For 2014, the central message is that “Big is the next big”; meaning that the larger companies should now position themselves to use their resources and sheer heft to become market disruptors in their own right. Over the last few years, as we all know, small, startup companies have used new technologies to disrupt settled markets and, in the process, have become giants. One thinks of Facebook and Google.

Read more about Big Bang Disruption and what it means for strategy.

Now, we believe, the bigger companies are starting to leverage their vast resources and capital to exploit fully the opportunities the digital world and its platforms present. These companies are, in the words of the Vision, “weaving digital technologies throughout their operations to drive business and industry disruptions to their advantage.”

This is all very germane to insurers, both life and P&C (property and casualty). Insurance carriers are by their very nature large companies with lots of capital—something that’s particularly true for life carriers. Without their size, they would be unable to act as convincing risk mitigators with the resources to cover losses.

Insurance companies, in other words, have the resources to put behind their efforts to become market disruptors in their own rights. They are certainly putting significant investment into the digital technologies that are the first step to equipping themselves for this role: the 2013 Digital Insurance Survey: Europe, Latin America and Africa reveals that P&C insurers have committed an average of €30 million ($40.6 million) and life insurers €21 million ($28.4 million) to digital transformation over the coming three years. The figure rises to €51 million ($69 million) for multi-line insurers.

The other driver is that insurers are very, very aware that their traditional value chains are under threat from disruptors from outside the industry. As the same research shows, 12 percent of life and 16 percent of P&C insurers are already experiencing competition from new entrants—with a further 41 percent and 60 percent respectively expecting new competitors to appear within the next three years. This is confirmed by the Accenture 2013 Consumer-Driven Innovation Survey, which makes clear, insurance customers are ready and willing to defect to providers who can offer them the personalized, consistent, cross-channel experience they crave. Sixty-seven percent of respondents would be prepared to buy insurance from non-insurers, including 23 percent from online providers like Amazon or Google.

Becoming a disruptor thus seems to be a good option for companies tired of being in reactive mode, and eager to take the initiative in creating new niches for themselves. It only remains to work out what that actually means: Where are the disruption opportunities, in fact?

Jean-François Gasc

Managing Director – Insurance, Strategy Consulting, EALA

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