As property/casualty carriers build digital insurance distribution models and shift from a product-focused sales process to one based on customers’ needs, they see that this evolution cannot occur in isolation. They will have to partner with established players in other markets to enable customers to buy insurance while making non-insurance purchases.

Only by participating in such ecosystems can insurers contribute to the so-called living services that consumers increasingly prefer but which carriers cannot provide alone. Living services respond by wrapping around consumers, constantly learning more about their needs, intents and preferences, so that they can flex and adapt to make themselves more relevant, engaging and useful.

Leading insurers already understand that they must reach out to new partners. These carriers are creating or joining new ecosystems that transcend industry boundaries to facilitate the end-to-end buying experience customers demand. According to Accenture’s new survey, Reimagining Insurance Distribution, 40 percent of insurers either already partner with non-insurance companies or consider it a high priority.

In addition, nearly half of the survey’s 414 respondents—which are located in North America, Latin America, Europe and the Asia/Pacific region—are going beyond collaborating with non-insurance partners. Forty-seven percent are teaming up with start-ups or other non-industry players to speed up digital innovation.

Linking products and services to the Internet of Things (IoT) is one example of how carriers can benefit by partnering with companies outside of the insurance industry.  While many large commercial carriers already offer customers a risk management service, the proliferation of lower-cost networked tracking devices offers carriers the opportunity to move up the value chain and drive growth. With these devices, carriers can evolve from providing indemnification for a negative event–a loss–to a more proactive, positive role of continuously helping customers prevent losses.

Initially, property/casualty insurers focused largely on vehicle telematics. But leading carriers’ IoT-related products and services and pilots have mushroomed by as much as three-fold over the past 12 months. For example, regarding connected homes and buildings:

  • 17 percent of surveyed carriers reported they had launched products or services or were about to in 2015, compared to 5 percent in 2014.
  • 22 percent reported they had launched pilot programs or were in test phases in 2015, compared to 9 percent a year earlier.
  • 22 percent reported they had a defined strategy in this area in 2015, compared to 6 percent in 2014.
  • 21 percent of surveyed insurers in 2015 had discussed an IoT-related products and services strategy but had made no concrete plans. A year earlier, half—or more than twice as many insurers—reported they had discussed an IoT strategy but had made no plans.
  • 18 percent of surveyed insurers in 2015 reported having no interest in an IoT-related strategy, compared to 30 percent a year earlier.

In the survey’s comments section Royal London Group’s Alex Koslowski, head of consumer proposition, observed: “We’re definitely excited about the potential of the IoT. Already, any smartphone user has got a motion sensor, GPS, and a step counter with them at most times. At some point you will be able to create behavior profiles that are incredibly valuable when it comes to risk-pricing that particular person.”

To learn more about the study, download Reimagining Insurance Distribution.

Next time: The future of aggregators.

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