Other parts of this series:
- Insurers are grasping the need for ecosystem partners in the new sharing economy
- Insurers must re-examine all their business operations to capitalize on the power of digital ecosystems
- Insurers must move now to secure a presence in digital ecosystems and be ready to seize new opportunities
- Insurers must balance the needs of their traditional businesses with the demands of new digital ecosystems
- Insurers can learn a lot from how Google is balancing the demands of its traditional and emerging businesses
- Insurers need to be alert to the role of the Internet of Things in the rise of digital ecosystems
- Insurers must be ready to compete in markets that will be increasingly disrupted by digital technology
- Insurers must change from being providers of products to digital ecosystem orchestrators
One of the most important stages of human development takes place when a person realizes they need to co-operate with other people. They recognize that it’s better for them to share with others than to live just for themselves. This great insight changes the way a person sees the world. And it changes how they see themselves.
Businesses throughout the world are currently undergoing a similar process of enlightenment. They’re coming to realize that if they want to be successful in future they need to start co-operating more with one another, rather than just following their own paths. They need to share not only resources but also markets, revenue and customers. It’s an enormous change.
Many insurers are already grappling with this challenge. Around 72 percent of insurance executives around the globe are planning, or have already established, new distribution partnerships. It’s not easy. But carriers that don’t embrace this new sharing economy risk falling behind their competitors. They’ll miss new opportunities and are likely to lose many customers.
The catalyst to this transformation is, of course, the rise of digital technology that is sweeping the world. And, in particular, the rapid emergence of digital ecosystems. These networks of multiple suppliers, services and consumers provide highly dynamic digital environments where customers can engage with a wide variety of vendors and many different offerings. They enable organizations to increase the effectiveness of their digital platforms, which host their services and products, by integrating them with those of other suppliers.
The benefits of such collaboration are huge. Co-operation across digital ecosystems accelerates revenue growth, opens lucrative markets, attracts and holds new customers, strengthens brand awareness and secures significant competitive advantage. And these are just some of the more obvious ones.
Digital pioneers such as Google, Amazon and Facebook have demonstrated the enormous power of ecosystems and are growing highly successful businesses around these environments. Nearly half the world’s top 30 brands, by market capitalization, are built around digital platforms. They’re all set to drive the spread of digital ecosystems throughout a wide range of industry sectors and across the globe.
Progressive insurers such as Allianz, AXA, Ping An, Discovery and the United Services Automobile Association (USAA) are already deploying key products and services across digital ecosystems. And they’re gaining significant benefits.
The increasing importance of digital ecosystems will certainly shake up insurers’ sales and distribution networks. But its impact is going to be far greater. It will force insurers to re-examine how they conduct their businesses in the new sharing economy. They’ll need to relook at themselves and how they see the world.
In my next post I’ll discuss the impact of digital ecosystems on insurers’ business operations. Until then, have a look at this link. I think you’ll find it helpful.