In many recent blog posts, Accenture experts have discussed why it’s important for insurers to expand their ecosystems by partnering with non-traditional players, especially financial technology businesses, to serve the evolving needs of an increasingly sophisticated customer base.
According to Accenture’s Digital Innovation Survey for Insurance 2014, more insurers (61 percent) are considering or already offering a range of non-insurance products in addition to their traditional offerings. These products include motoring (55 percent), home services (54 percent), and other financial services (52 percent). Other non-insurance products in development include loyalty rewards (66 percent), home services (63 percent), and lifestyle products (56 percent).
We classified one in four of the insurers we surveyed for the Digital Innovation Survey as Digital Transformers—insurers that are investing in digital technologies with the primary aim of finding and developing new sources of customer value. Fifty-four percent of these Digital Transformers believe establishing new partnerships is key to differentiation. They have embarked on more distribution partnerships with new insurance startups (47 percent) and online service providers like Google, Apple or Facebook (53 percent).
To deliver new offerings and extend the insurance value chain, Digital Transformers recognize the need to partner with non-insurance tech players: 82 percent of respondents expect to make acquisitions to position themselves more competitively in the digital landscape over the next three years, primarily through new digital startups (59 percent) and telematics-related companies (47 percent); 43 percent had made or were planning acquisitions of startups or other innovative players.
In many cases, the ability to provide innovative new offerings hinges on a traditional insurer investing in a startup business. The inherent conservatism of many carriers, together with their legacy structures, processes and practices, makes it difficult for them to innovate internally.
Among the Digital Transformers, 62 percent have or plan to acquire innovators or startups in order to position themselves more competitively for the opportunities of digital.
What kinds of investments are actually taking place in the area of insurance startups? Where and how are global insurers expanding their reach into other industries to best serve this need?
Next week we’ll take a look at another study that outlines where and how global insurers are investing in startups and other innovative businesses.
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