Other parts of this series:
An estimated $80 billion in potential revenue is available for living business insurers willing to embrace new relationships with non-traditional partners.
We’ve covered two of the revenue streams offering insurers the greatest potential for growth—increased market penetration and new emerging risks. In this final post in the series, we’ll look at the estimated $80 billion of revenue tied to relationships with ecosystems and non-traditional intermediaries, such as insurtechs, GAFAs (businesses like Google, Apple, Facebook and Amazon), payroll companies, wellness companies and lifestyle brands.
At Accenture we do not believe agents will be displaced entirely, especially in commercial lines. However, insurers could learn from other industries that provide a more natural buying process. Carriers need to take a step back and assess which of their existing distribution mechanisms are truly differentiated and where they should make additional or alternative distribution bets to drive growth. This is an area highly targeted by insurtechs and non-traditional entrants into the insurance space.
Once carriers have identified where to find value in distribution, the next step is to find a way to interact with these new intermediaries. In life and retirement, for example, there are ecosystems or platforms that occupy consumers’ lives today, but lie outside of a current insurance-driven platform. Designing experiences that naturally hang off these existing interactions is critical for driving consumers’ education and engaging them in a meaningful and valuable buying process. The same is true for small commercial carriers, as I mentioned previously. Providing an experience that starts on a partner’s platform and then seamlessly transitions into a carrier’s buying process is one that requires deliberate research and design around customer needs and intentions.
Beyond thinking about design, the concepts explored in prior posts around building/iterating and connecting apply to this revenue stream as well. But the need for flexibility in technology and business approach is probably most pronounced in capturing this revenue stream. As insurtech partners come and go, consumer needs and expectations evolve and intermediary platforms succeed or fail to prove their worth in the insurance value chain, those carriers that have built the organizational agility to technically plug-and-play partners and modify processes most quickly will be the winners.
Accessing this entire revenue stream is predicated on a carrier’s ability and desire to connect with external, non-industry partners. As soon as carriers recognize the value in this, the real work begins to build the necessary organizational agility.
With a $375 billion revenue opportunity up for grabs—particularly in the areas of increased market penetration, new emerging risks and relationships with ecosystems and intermediaries—insurers that use design thinking, building/iterating and connecting to develop living business capabilities will be the ones in the best position to grab the largest piece of the pie.
To learn more about living business capabilities, register to read our report: Insurance as a Living Business: Explosive Growth.