With their deep pockets, insurers have a built-in advantage.
One of the points that Digital Insurance Network delegates made repeatedly was that insurers typically still have relatively strong balance sheets, and so can invest in these new digital technologies—and the new business models they enable. It seems clear that these new business models will involve a greater emphasis on value-added services rather than just products—something that consumers have certainly indicated they want.
The recent Accenture 2013 Consumer-Driven Innovation Survey shows that consumers want more than just insurance: they want help in managing risk, and they want services that are personalized. Read the full survey report or customize your view of the data using our new online data visualization tool.
Insurers are already well situated when it comes to providing this new type of value-added service because they are already integrated into fairly established ecosystems by virtue of their complex go-to-market models. These partners could form the nucleus of a group that would help the insurer deliver more than just insurance product.
For example, the emergence of telematics in auto insurance is giving rise to all sorts of value-adding opportunities that could be explored along with other members of that ecosystem, particularly if you expand thinking beyond cars and into the “Internet of things.”
In fact, the whole notion of connected vehicles/ buildings/ machines generally offers a plenitude of opportunities for insurers to add value, often by adding real-world products to their services. For example, the insurer offers home-security installation as part of its value-add to the connected home—with an impact on the premiums the customer pays, of course.
Another plus is that insurers, life insurers that is, are already substantial property owners. Given investment, these property investments could become the pivot of new services to customers; for example, retirement facilities, or home safety monitoring. Read one of my earlier blogs to explore this concept a little further, albeit from a slightly different angle.
If one takes a step back, it’s obvious that these types of opportunity are ultimately all opened up by the flexibility to understand and act on customer needs given by digital technologies.