Going solo is no longer an option for companies striving to be successful in the insurance industry. The rapid rise of the Internet of Things (IoT), and the increasingly interconnected digital economy, is forcing insurers of all sizes to look for strategic partners. Future allies are likely to include not only rival insurers but also businesses that have traditionally operated in other markets.
More than 80 percent of insurers surveyed by Accenture believe the boundaries of the insurance business are already blurring. In addition, 61 percent are looking to team up with enterprises with strong digital expertise.
Successful insurance companies, the new Insurers of Things, will build their businesses on digital platforms that often incorporate the services of partners. This is likely to require substantial changes to their IT architectures. Flexibility, as well as inter-operability with external partners and suppliers, will be essential. Key requirements include:
- Data monetization by integrating in-house information with data provided by external partners.
- Support for external services that are part of bundled product offerings delivered across the digital ecosystem.
- Extensive use of “as-a-service” resources to hasten the delivery of new products and customer services.
- Greater insight into business performance by improvements in the management of data across the whole value chain.
The rapid change that will characterize the insurance industry in future will require many organizations to split the management of their IT resources. They will need to orchestrate the innovation and evolution of their legacy systems and processes. At the same time, they must move quickly to manage security threats and roll out new products and services.
Securing the correct technology and the best partners is essential. However, something more is needed. Insurers must develop and promote a culture of innovation throughout their organizations. The IoT will radically change how people work and what is expected of them. The ability to innovate will be priceless.
Innovation is not a peripheral activity. It should be at the heart of the organization. Insurers need to design and implement a governance framework that encourages quick innovation and experimentation throughout the business. Changes to the organizational structure and key roles within the company are likely to be necessary. They should be phased in to avoid disrupting the day-to-day running of the company.
Meeting the demands triggered by the IoT is not going to be easy. But the rewards for companies that move quickly and decisively are likely to be substantial. The Insurers of Things will be the market leaders of the future.