Insurance Blog | Accenture    

Ecosystem partnerships are a growing trend in many areas of global business, including insurance. Such partnerships offer attractive benefits to insurers, like increased access to data, more personalized products & services, improved customer experiences, and new marketing opportunities. These partnerships are based not only on strategy, products and services, but also on merging technology and sharing platforms.

For instance, in Japan, the Toyota Research Institute, MIT Media Lab and other partners are exploring the use of blockchain and distributed ledger technology for sharing autonomous vehicle data. Gem, Toyota Insurance Management Solutions and Aioi Nissay Dowa Insurance Services are collaborating on a usage-based insurance platform for this initiative.

Similar partnerships are developing in other areas of insurance. Home insurers like USAA and American Family are working with connected-home technology companies to personalize pricing and help customers avoid claims in the first place. Insurers like Nationwide and Liberty Mutual Insurance in North America are starting to leverage platforms like Amazon’s Alexa and their surrounding ecosystems to access new customers or create new customer experiences. In commercial insurance, The Hartford Steam Boiler Inspection and Insurance Company has invested in relayr, an industrial Internet of Things (IoT) platform and Augury, and a predictive machine diagnostics company, to position itself at the forefront of the IoT.

Many of these initiatives run into the same problem: legacy business systems simply were not built to support such technology-based partnerships. Most business systems in use today were built in silos, intended only to operate within each business. As insurers now expand their networks, engage in ecosystems, and shift rapidly between them, their outdated systems can’t keep pace. In some instances, they represent the biggest barriers to growth.

Insurers now need to evolve with IT architectures that support partnership at scale. This is likely to involve two key technologies: microservices and blockchain.

Microservices break down applications to their simplest core functions, with each function being treated within the organization as a single service with its own application program interface (API). Larger applications are strung together by making API calls to each of independent service. Critically, these API calls can include services outside the organization, thus supporting partnerships.

Blockchain is a way of storing data in a distributed ledger that allows multiple stakeholders to confidently and securely access and modify the information. Among its many applications, blockchain is a powerful tool for enabling collaboration between different parties who may not have perfect trust in each other. It will play a key role in creating, scaling, and managing business relationships through its ability to hold partners accountable without the need to first build trust.

Several leading insurers are already using APIs to expand their business ecosystems and create new revenue streams. For example, Allstate Roadside Services division launched the Good Hands Rescue APIs, which allow third parties to leverage Allstate’s roadside assistance network in their own apps. Arity, a tech company spun out of Allstate, offers APIs that let third parties tap into Allstate’s aggregate data on driver behavior and risk prediction tools.

For insurers, the time has come to re-evaluate how they architect their applications and services, which must include moving toward microservices to set the foundation and quickly build the relationships needed for growth.

For more on getting started with microservices and blockchain, read the 2018 Accenture Tech Vision for Insurance here.

Next week, I’ll wrap up this series with a look at another trend: the Internet of Thinking.

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