As new data-driven, customer-first business models emerge, insurers will have to stake their claim to relevance.
Digital optimization is segueing into data monetization, with considerable overlap. The digitization of existing channels and processes is in fact the necessary foundation to enable insurers to develop new business models. These models will take account of a more customer-centric business environment by collaborating with ecosystems of partners to identify and service customer needs.
Think of it as digitization (the grey model in the diagram) giving way to digitalization (blue in the diagram), if you will. Customer data becomes the yardstick of value.
So what does this mean in practical business terms for insurers? What does a “blue insurer” look like?
One example could be a human telematics service in which a health or life insurer sets up an ecosystem with a telco, a corporate and a pharmaceutical company to offer the corporate’s staff advice about living a healthy lifestyle. This approach reduces claims and enhances underwriting profitability (grey model), but its true impact is that it shifts the business model to advice-giving rather than pure sales (blue model). The insurer starts to move from a traditional insurance role to that of a risk manager and advisor. The insurer could aggregate the data, analyze it and develop new “advice-based” revenue streams based on its conclusions.
Or consider the possibilities of auto telematics. Some uses are obvious (for example, premium adjustment related to driving style) but what about infotaintment and broad transportation-related services coupled with telematics? Before long we will start thinking about the car as another channel, joining the Web, mobile devices, contact centers and agents as ways to interact with end-customers.
The recent announcement from Toyota that it was launching T-Connect is a great example of this type of thinking. Aimed at its home market of Japan, T-Connect will enable customers to download third-party apps to their cars’ navigation systems. It refines and automates services already offered in that market via G-Book, but it now adds the ability to download (and pay for) third-party apps via the T-Connect app store. These add-ons will be offered in four categories: communication, driving assistance, information and lifestyle.
Crucially, T-Connect uses an open development environment (Toyota Open Vehicle Architecture) to make it easy for app developers to create apps. Insurers need to be considering making a small investment to enter the app world—for example, by collaborating with auto manufacturers (including sharing data) to co-invent the next generation of services.
These are just some of the ways in which the “digitized” grey business model blends into the “digitalized” blue one, a convergence that will drive opportunities for insurance.
Next time, I’d like to explore why the successes—and excesses—of the data monetization model are sowing the seeds for the next wave of disruption.
Download the Accenture 2013 Consumer-Driven Innovation Survey to learn more about how consumer wants are driving this disruption, and Insurance telematics: A game-changing opportunity for the industry.
To see what some insurance innovators are doing with data, read the blog series by my colleague Thomi Meyer.