Insurance Blog | Accenture

Every sector of the life, pensions & investments (LP&I) industry is under extreme pressure. And long-term savings & wealth (LTS&W) businesses are certainly no exception. In this new blog series we’ll be looking at how these businesses can remain competitive, increase market share and reinvent themselves to thrive in the future.

The solution? Becoming what we call digital ‘living businesses’ – agile, innovative, truly customer-centric organisations that continuously adapt to be hyper-relevant at every stage in the customer lifecycle.

With unwavering customer-centricity, fluid operating models and flexible platforms and talent, these living businesses’ organisational ecosystems flex and evolve with each new innovation. Just like living organisms, their innate vitality and responsiveness to their environment means they never stand still.

Digital front-to-back throughout the enterprise, living LTS&W businesses think about every component of the organisation as inherently connected, smart and data-driven: from customer relations through skills development to capacity hotspots and back-office functions.

Built like this, they’re able to provide personalised products and services that mesh with each of their consumer’s changing life needs, preferences, priorities and goals. To put that into context, think about the journeys LTS&W customers are on.

Early on, their priorities include paying rent and covering income shortfalls. Later, the emphasis shifts to buying houses and raising families. Then in their 50s and 60s, ‘sandwich generation’ customers’ responsibilities change again. They have both elderly parents and yet-to-be-independent children to support.

LTS&W businesses must offer relevant products and services at every stage, anticipating what their customers want and helping them negotiate challenges along the way. Think about the kind of flexibility and personalisation that Even Financial offers. This US fintech has built a business that connects individual customers with the right financial products at the right time in their lives.

In the insurance industry, Vitality offers its customers life insurance products that reward them for being healthy, with tie-ins to tech providers and gyms to improve wellness. Or what about Prudential? It’s developed a package of interactive tools and materials to enable employers to help their employees create and implement personalised solutions for financial wellness.

Their Wellness Effect uses digital tools to carry out a personal analysis, design a financial plan based on individual goals, and provide an online portal to track progress and stream relevant content and advice. It includes proposals to fill insurance gaps, offer debt management solutions and automate portfolio management.

Overall, becoming a living business presents extraordinary opportunities for insurers. Our research points to US$375 billion in worldwide revenue potential ($105 billion of it in Europe) for the insurance industry within the next five years. These rewards will be captured by insurers that move now to transform themselves into living businesses.

Three threats to competitive advantage

The time to start this transformation has definitely arrived. Up to now, most insurers have managed to withstand the disruption that’s hit the industry. But a convergence of factors means transformation has become an urgent priority. In the LTS&W market, every business faces a fundamental issue: not enough people are saving sufficiently for their retirement. But there’s more, with three core challenges coming together to threaten future competitiveness:

  1. Evolving consumer expectations – consumers expect propositions to be tailored to them as a ‘segment of one’; these liquid expectations flow from their experiences in the digital retail market where slick, seamless interactions are taken for granted – look at Uber, Deliveroo, Ocado, John Lewis or Amazon.
  2. Ferocious competition – margin pressure and the need to maintain super-low costs dominate the LTS&W market.  Allied with this, the need for ongoing consumer relevance, a compelling service offering, agility, efficiency and differentiation in the face of increased competition from new entrants are critical.
  3. Access to advice – regulation and cost pressures have led to advice challenges; the winner is the LTS&W company that can successfully embrace technology to bring down the costs associated with human advice and/or deliver a compelling digitally-enabled direct-to-consumer (D2C) advice offer.

LTS&W participants have all embarked on digital transformation journeys to varying degrees, supported by increasingly agile operations. But the competitive landscape is changing so rapidly, with consolidation, new entrants and innovative service offerings, that the message is a brutal one: pivot to become a living business or risk imminent obsolescence.

In the next blog in the series, we’ll explore in more detail the solution we’ve developed to help organisations become digital living businesses. In the meantime, I’d love to hear your views. So please leave a comment or email me. Thanks for reading.

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