Other parts of this series:
More consumers are seeking life insurance today than in any time in decades. According to a LIMRA study, there are 60 million un- and under-insured households in the United States, representing a $12 trillion coverage gap and an enormous opportunity for the industry. But if insurers want to reach this underserved market, they need to up their games by providing consumers with personalized products offered through convenient digital channels.
But not all insurers are equipped for the challenge and many will have to make a choice. Some will choose to build their own digital capabilities that today’s consumers expect, such as video onboarding, self-service portals, and automated, AI-driven underwriting and claims. Others will choose to tap into developing ecosystems, where insurers can choose from a virtual catalog of providers to meet their digital needs, almost like visiting an app store. Insurers that choose to connect to an ecosystem, however, will need to modernize their core insurance systems for new business, underwriting, and policy administration — and it must all run in the cloud.
Insurance ecosystems of the future: Multiparty systems
Coordinated, strategic ecosystems will require an entirely new data infrastructure to thrive, and this is where multiparty systems come in. As we described in Accenture’s Technology Vision 2021, multiparty systems use a variety of technologies to record and share data among individuals and organizations, achieving new levels of speed, privacy, and security. For insurers, multiparty systems can drive new efficiencies and enable the development of new business and revenue models. In the health care industry, for example, one study found that investments in industry data interoperability could save $30 billion in administrative costs.
We see a similar opportunity for the insurance industry in open platforms and standardized APIs. With digital ecosystems and seamless connectivity, insurers can break free from traditional industry boundaries to explore new capabilities and new markets. We’re seeing this in the digital health market where insurers are collaborating with health and wellness providers to help consumers improve their health and provide financial protection for themselves and their families. This, in turn, can lower their risk when buying a life policy and encourage them to remain healthy and engaged throughout the policy lifecycle.
Providing value across the insurance industry
Insurers, policyholders, and the industry all benefit from efficient interconnected systems that can drive out cost and add value by providing products and services that help consumers solve problems. Technology plays an important role. According to analyst firm Celent, ecosystem transformation is a top priority for insurers in 2021, and they expect insurers to increase spending on technologies related to customer experience. The insurance ecosystem holds a lot of value for both the front office, in customer experience innovation and the back office, in operating efficiencies. And the ecosystem continues to expand as new insurtechs enter the market.
Companies with robust digital presences were able to move quickly during the pandemic. The lesson for every business leader was that technology-based ecosystems are the foundation for future growth and leadership, and insurers can’t up their games if they don’t have the right equipment. Investing in the platforms that will launch new partnerships is the most immediate action for enterprises to take—but it’s just the first step.