Other parts of this series:
- Data monetization – the next oil or fool’s gold?
- Insurtech firms could help carriers unlock vast data profits
- Five smart tips for successful insurtech partnerships
- Partnerships are the key to insurance data monetization
- Veracity is critical to the success of insurance data monetization
- Carriers must keep agile to stay in step with data laws
- Bold insurers are taking the lead in data monetization
Alliances with insurtech firms often require carriers to make difficult changes to their business models.
The growing influence of scores of new insurtech firms, eager to disrupt the traditional insurance industry, has alerted many insurers to the huge potential of data monetization. Plenty of these start-ups are keen to work with insurance companies to help them use their data resources to improve efficiency or create new sources of revenue.
By collaborating with innovative insurtech companies, conventional insurers can capitalize quickly on a wide range of data monetization opportunities. However, such alliances, as I mentioned in my previous blog post, are not always easy. They often require carriers to change their operating models substantially. Managing such change needs a careful balance between allocating skills and resources in new business opportunities and ensuring the development of legacy systems and processes. At Accenture, we term this careful transition “rotating to the new”.
We’ve identified five aspects of insurtech-carrier partnerships that are critical to the success of such collaboration.
- Maintain “brilliant basics”. It’s easy for carriers to be distracted by the tempting array of new business opportunities their insurtech partners might provide. Core systems and processes, critical to the wellbeing of the organization, can often be neglected. By maintaining “brilliant basics” to ensure that core operations continue to thrive, insurers can build a sound foundation for innovation to occur throughout the organization. Without such a foundation, innovation will often be relegated to the fringes of the business.
- Understand customer expectations. Start-ups often have a keen understanding of shifts in customer expectations. They frequently have good insights into the whims and wishes of young consumers. Insurers should tap such knowledge to enhance their products and services and also improve the customer experience they provide.
- Become fearless. Caution has long been a hallmark of successful insurers. The fast-moving digital economy, however, requires insurers to cultivate a greater willingness to take risks. They can learn much from start-ups that have recognized that failure can sometimes be a stage on the journey to success. By adopting “test and learn” approaches to product innovation, development and distribution, for example, insurers can increase their agility, accelerate the roll-out of new offerings and better align themselves to the needs of their customers.
- Build an extensive innovation structure. Collaborating with start-ups is only one part of the innovation process. Insurance providers need to ensure that innovation takes place throughout the organization. A comprehensive innovation structure should nurture, test, build and scale-up innovation in all parts of the business. An important facet of an effective innovation structure is its capacity to balance “aspirational” and “pragmatic” modes of thinking. Early “aspirational” approaches, which focus on the possible capabilities of an innovation, should, before substantial funding is allocated, be challenged by “pragmatic” questioning that queries the real value an innovation might deliver to the organization. Both modes of thinking should be kept in tension.
- Develop start-up ecosystems. Insurers often don’t have sufficient skills and resources to work with lots of insurtech firms. By drawing start-up partners into their digital ecosystems, insurance providers can manage their relationships with these firms more efficiently. Furthermore, they can encourage groups of insurtech firms to work together to address specific challenges the insurers want to overcome.
In my next blog post I’ll discuss why insurers should cast their net wide when looking for partners to help them monetize their data. Meanwhile, have a look at some of these links. I think you’ll find them useful.