The rapid rise of the digital economy is forcing insurers to innovate to survive. They must develop new products, improve customer experiences, secure additional markets, adapt their culture and change the tasks their employees perform.

Insurers throughout the world are having to face one of the stark realities of the digital economy – innovate or die.

This is a huge challenge for many insurance providers. They’ve built their businesses on their ability to assess risk, invest capital and manage the collection of premiums and the payment of claims. Now insurers have got to emulate digital front-runners such as Google, Apple, Facebook and Amazon. They have to innovate to survive. They must develop new products, improve customer experiences, secure additional markets adapt their internal skills and culture and change the tasks their employees perform.

This is not a once-off shift. It’s a constant requirement. And it’s going to get more and more pressing. Insurers that fail to develop the ability to constantly innovate will see their business rapidly eroded by more nimble carriers and a slew of agile, digitally-savvy newcomers to the insurance market.

The need to innovate is being driven by several powerful forces. Each of them triggered by the rapid spread of digital technology. They include:

  • Increasing competition, especially from Insurtech start-ups and other newcomers to the insurance market. Five leading insurtech start-ups, Zhongan, OscarHealth, Zenefits, Gusto and Clover, secured US$2.5 billion in funding last year and legions of other fledgling tech firms are targeting the insurance sector.
  • Rising expectations among customers accustomed to highly-tailored offerings from digital service providers. Consumers and businesses are demanding more personalization from their service providers and are increasingly price sensitive.
  • Blurring of traditional insurance market boundaries, accelerated by the rise of digital ecosystems and platform businesses. Our research shows that a telling 94% of insurers think it is very or somewhat important to adopt platform-based business models and engage in ecosystems of digital partners.
  • Changes in workforce demographics. Millennials, or digital natives, comprise the majority of the global workforce and by 2025 they’ll account for 76 percent of all workers. Around a third of the US workforce are currently freelancers and this will rise to 40 percent within four years. These shifts will require insurers to change substantially how they manage their human capital. Indeed insurance executives polled for our technology vision estimate that 53% of insurance jobs already have a digital component today, rising to 63% in 3 years
  • The spread of intelligent and robotic systems. UK law firm Berwin Leighton Paisner last year installed a robotic system that processes 100 days of legal admin work in just two seconds. Similar systems are beginning to automate admin processing, as well as customer support at insurers.

Innovation was the focus of the recent Digital Insurers Network (DIN) gathering in Paris. The DIN is a European insurance industry think-tank co-ordinated by Accenture. At the Paris meeting nearly 40 insurance executives, consultants and technical specialists discussed ways they could improve and accelerate innovation.

Innovation has rarely been a prominent feature of the insurance industry in the past.  But judging from the talks at the DIN meeting, insurers have plenty of ideas about how innovation can drive their businesses in future.

In my next blog post, I’ll discuss one of the big barriers to innovation identified by delegates at the DIN gathering.

If you would like to learn more about the DIN, please email

You can also check our “2016 Insurance Technology Vision” for more reasons to innovate.


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