Other parts of this series:
Insurers can no longer depend on customer loyalty to support growth—it’s now about staying relevant and developing the capabilities to keep up with customer needs.
Sustainability is the buzzword of the 21st century, and insurance companies are quickly realizing it isn’t only about becoming more environmentally-friendly for our planet—sustainability also extends to the growth of an organization. This means having to constantly adapt and cater to the continually changing needs and wants of the customer, in order to stay relevant to a customer base that swiftly shifts with the digital tide. To achieve this, insurers need to be Living Businesses.
Accenture’s recent research findings show that rapid advances in technology have altered the insurance landscape to a degree that customer loyalty is no longer being built—that takes too long—it needs to be kept. And the means for insurers to keep consumers from moving on to competitors is customer-focused agility and hyper-relevance.
Leaders in sustainable growth are staying relevant because they:
- Have a better understanding of the changing digital needs of customers;
- Pivot growth strategies to profitable areas beyond the core;
- Fund new growth by optimizing costs elsewhere.
In this series, we will explore the ways of staying relevant in the digital landscape. To begin, here are four charts that emphasize the importance of sustainable growth, and why there’s still some work to do.
High-performing insurers are staying relevant and seeing results by developing five capability sets.
In 2018, Accenture’s Living Business Survey researched more than 1,000 companies and assigned a ‘vitality’ score to each organization. The sample included 309 financial services (FS) providers—137 insurance carriers and 172 banks—in 28 countries. Findings showed that the companies that are achieving continuous growth have developed five interdependent capability sets; and while all are excelling at them, the gap varies between the high performers (of which 13 are insurers and 17 are banks) and the rest of the insurers.
With a customer-centric focus, these capabilities represent the key to growth in the future:
- Target new opportunities
- Design for customers
- Build engagement
- Scale with partners
- Rewire culture
From these results a vitality score was assigned, with those more proficient in the capabilities, naturally, scoring higher.
Living Businesses are best positioned to survive disruption.
When taking the survey, the respondents were asked to rate, on a scale of 1-5, their organization’s readiness to ‘survive’ past and future disruption. Those with a higher vitality score—the Living Businesses—accounted for 10 percent of the survey sample and were 67% more confident than those that achieved average and low scores.
Insurers that become Living Businesses are more likely to outperform their peers.
Insurers that have developed the five capability sets are demonstratively better equipped for rapid and sustainable growth. As shown in the above chart, 38 percent of those with high vitality scores—Living Businesses—achieved revenue growth rates at least 150 percent higher the average insurer, and 54 percent saw the same results in their profit growth rate. While there were some carriers with low and medium vitality scores that achieved similar high rates, the likelihood of doing so was, in both cases, significantly lower.
The numbers don’t lie—Living Businesses in the insurance space are focusing on their customers and seeing the results of being hyper-relevant.
Insurance high performers excel at three capability sets.
High performing companies reported excelling at all the capabilities, but each industry’s strong suits differed. The standout capabilities for those in the insurance sector are: Target New Opportunities, Design for Customers, and Rewire Culture. Overall, being aligned with these capabilities allows for better identification and pursuit of investments that meet and anticipate market expectations. And with that comes the advantage and ability to personalize offerings for the consumer.
The insights in these charts present a strong case for sustainable growth for insurers that strive to become Living Business. The full survey findings and report can be downloaded here.
Our next post in the series will break down the capability sets with statistics to highlight the importance of being hyper-relevant in the digital landscape.