Other parts of this series:
The insurance revenue landscape has changed radically in the past year, and will continue to change. In this series, I have been discussing the nature of this change, and exploring how insurers are practically reimagining their businesses. The only question left is: where to, next?
As traditional revenues are slowly replaced by innovation-led revenues that reflect the changing needs of customers, insurers need to shift their business. Our Insurance Revenue Landscape 2025 identified the following four areas of innovation.
- Health, wellness and life products and services
- Sharing economy, climate change and cyber threats
- Technology integration within traditional products
- Shift to alternative distribution
This is a helpful guide, but the true measure of resilience and market relevance will lie in how insurers respond to these trends. We suggest beginning with the areas of innovation in which your business has a headstart, based on your current book of business and market positioning.
Take the example of AXA XL Risk Consulting, which leveraged their existing risk assessment knowledge with a digital edge. The insurer recently launched Risk Scanning, a new global risk assessment service that combines the expertise of AXA XL’s risk consultants with data-mining capabilities and probabilistic algorithms to carry out multi-peril assessments of a company’s physical locations. Risk Scanning allows risk managers to make assessments of their company’s sites by region, country or peril, which affords them a better understanding of their exposures. This allows them to implement risk management and risk transfer strategies that more accurately matched to customer needs.
Global trends in innovation don’t look the same in every market. The four innovation areas outlined above pertain to every market, but will succeed if carefully adapted to the needs in that region. Vitality, for example, is the world’s largest scientifically proven wellness programme. By gamifying key facets of health and wellness such as exercise, healthy eating, regular check-ups and more, Vitality motivates its members to live healthier, thereby reducing their medical costs. In November 2014 the Generali Group entered into a partnership with the financial services provider Discovery to apply the programme in Europe, which led to a successful rollout in Italy, Germany, France and Austria.
Sometimes, the geographic and regulatory environment makes certain innovations more relevant. Climate change, for example, is an area of priority for Europe. Zurich UK is an insurer who recognised this, and has started putting the systems in place to drive sustainability. There is a significant amount of under-utilised data within a building’s management system so Zurich UK teamed up with technology partner GWTi to extract this data, analyse it and present it back to customers in a way they can understand & action. Based on the analysis, scores are presented to the customer through both a ’60 day health check report’ and a live dashboard that allows customers to monitor changes for themselves and spot areas of improvement. With sustainability and efficiency becoming a key focus for insurance customers, it makes sense to start looking at how to meet customer needs in this space. Building telematics is still new, and Zurich is the first insurer to offer a solution that covers both risk and sustainability.
In order to secure future revenue, insurers will need to reimagine how they deliver value to their customers. This is not as daunting as it may seem. By capitalising on their existing strengths and understanding the geographic and customer requirements, insurers can pivot successfully.
For further insights read the Insurance Revenue Landscape 2025 report.
Get in touch to discuss your innovation strategy.