Other parts of this series:
A $111 billion market opportunity will arise for life insurers in the next five years, according to new research from Accenture. The impact of this explosive industry growth will not be evenly distributed. Most will accrue to firms with a deep understanding of their customers. These companies, which we call “living businesses,” will adapt and innovate constantly to become and remain hyper-relevant in a changing industry.
As we’ve seen in this series, some firms in the life insurance space already resemble living businesses. Organizations like Wellth, Haven Life, and Policygenius are getting a jump on the future by developing their ability to quickly create and deliver meaningful, personalized products at the times that matter to customers.
Transforming into a living business will be no easy task for any life insurer—indeed, Accenture’s research suggests that most life insurers will miss out on market opportunities because of their inability to make this transition.
Those that succeed will strike the right balance between nurturing existing operations while exploring new sources of revenue. Accenture calls this process “pivoting to the new.”
This pivot starts with smart investments in a life insurer’s core business to lower costs and create growth. The funds generated from this transformation are used to launch innovative ventures that can create new revenue streams. Not all of these ventures are likely to succeed; the smart life insurer will quickly identify the most promising ones and shift resources towards “scaling the new.”
Accenture’s experience working with life insurers has taught us that succeeding in this transformation and becoming a living business requires excellence in five key areas.
1 – Targeting the right opportunities
Choosing the right growth opportunities to pursue will be crucial for making this transition. Life insurers will need to balance investment in their core business and in business adjacencies and new business models. They’ll need to decide where and how they want to engage customers, partners and competitors.
Many life insurers will be tempted to chase the most futuristic projects they can find. Accenture’s experience suggests that a logical, sequential approach is more likely to pay dividends. Smart life insurers will develop their capabilities to realize opportunities that currently exist. When these have been effectively scaled and made sustainable, such insurers will start targeting the ecosystems and risk exposures that will lead to explosive growth.
2 – Designing living services
Living life insurers will provide living services—those that create remarkable experiences for customers by acting on real-time insights from customer data and business analytics. These insights will also help life insurers move from pooling and pricing risk based on historical data to assessing and pricing it individually, directly, in real time. Living services will allow life insurers to move from providing insurance cover to providing risk management solutions customized to each customer.
3 – Building and iterating intelligent platforms
Organizational agility and accuracy on the level of a living business will require cutting-edge business platforms. Building them will require drawing on cloud-based technologies to unlock strategic actions like adding robotics and AI capabilities, embracing radical security, and opening and sharing application programming interfaces. An iterative mindset will pay dividends when creating such platforms.
4 – Connecting to diverse ecosystems
Many consumers, especially members of Gen Z and Gen Y, have a strong affinity with digital-native brands like Amazon, Baidu, Facebook, and Google. Surveys reveal that significant portions of these groups would buy insurance or other financial products from these firms if they were offered. Consumers also say they would be happy to buy financial services from their favorite supermarkets or other retailers.
Partnering with such organizations could drive tremendous benefits to life insurers. Living life insurers will achieve a powerful multiplier effect in creating compelling customer experiences by sharing visions, distribution channels, data, and value with a broad alliance of organizations within and beyond the insurance industry.
5 – Sustaining a fluid organization
Organizational agility is easy to imagine but tough to achieve. Living life insurers will need workplace cultures that embrace change and resiliency. They will empower their workforces to keep customers at the core of every plan and every execution. They will foster innovation and entrepreneurial thinking, and leverage intelligent automation to augment people and processes.
This list demonstrates that becoming a living life insurer is not easy. Yet the time to look at this model is now, as digital disruption begins to put pressure on the traditional insurance business model while creating exciting new opportunities.
Register below to read the full report from Accenture, or reach out to me to learn more.Insurance as a Living Business: Explosive Growth