Beyond Insurance: Embracing Innovation to Monetize Disruption

Beyond Insurance

Embracing innovation

to monetize disruption

Copyright © 2015 Accenture. All rights reserved. 1

Digital Transformers in the insurance

industry are looking beyond insurance.

They are optimizing their current business

& operating models where possible.

But they also seek to reinvent themselves

by innovating & diversifying their capabilities.

Introduction


Among the potential capabilities

are two important growth options.

1. Work closely with technology innovators to make

new products & services safe realities

Lloyd’s of London, centuries ago, helped transform the

risky shipping business into a global industry

2. Become trusted advisors to customers

Like a “life coach” who helps them manage

the complexities of their lives

Competitive threats are forcing

change – insurers need to take

swift action.


A host of challengers, technologies & consumer

trends have become real threats:

An industry at risk

Core products are often viewed as

undifferentiated commodities

• 21% of consumers believe insurers are

“the same in terms of offerings & services”

• Two-thirds would consider buying insurance

from organizations other than insurers




An industry at risk

New competitors are coming from

across industry lines.

• Google is licensed to sell insurance in the US,

provides auto & travel insurance quotes in the UK

• Walmart, IKEA & several mobile phone companies

provide insurance distribution

• Almost two-thirds of insurers believe external

players like online service providers & aggregators

will enter insurance distribution by leveraging their

digital capabilities




An industry at risk

Technology innovation will make some aspects

of insurance obsolete through shifting risk pools

• Autonomous cars will shift coverage from people

to machines—from personal to commercial

• Liability premiums are projected to decline by 20%

until 2018, then by 80% from 2018 to 2022

Most insurers are investing only in their current business model.

Those that understand the disruption are repositioning themselves

& pursuing growth options to move beyond insurance.


Transforming innovations & disruptions into safe realities

Option 1

Insurers should help make disruptive commercial

& technological inventions safe realities

• The horseless carriage would not have become

commonplace without insurance

• Advances in big data, robotics, nanotechnology,

genetic engineering & artificial intelligence have

the potential to transform our lives – but society

needs protection

• Someone needs to put moral & ethical bounds

on these inventions

• Insurance served as a proxy for & enforcer

of regulation—and can do so now

• Technology innovation offers significant

growth potential for insurers

– In Europe, “connected insurance” is forecast

to generate $19 billion in non-life premium

income in 3 years


Inventing & delivering trusted advisory services

Option 2

• As technologies & societies change, so do consumer needs

• Insurers have the potential to become embedded as a “life coach”

– A positive part of their customers’ daily lives

– Offer frequent, highly personalized advice

– Become a hub, aggregator or concierge, bringing together offerings from

a variety of related providers

– Address an increasingly higher percentage of individuals’ & corporations’

needs & intentions


Inventing & delivering trusted advisory services

Option 2


Three steps to to making the leap to new growth curves:

Generate a new era of growth

1. Create a “red team”

• Risk-averse culture, large-scale governance & time-consuming

processes will thwart most carriers’ efforts to transform the business

model within their four walls

• Need a separate entity to detect customers’ new needs & intentions,

create new services, cannibalize the business where necessary

• Foster a different approach to innovation, different metrics,

& a cross-industry, co-invention mindset




2. Transform to a human-centric culture

• Move to the same side of the table as customers

• Address a steadily increasing part of their daily needs

through new ecosystems of services

• Think outside the box – best ideas are more likely to come

from anthropologists & sociologists than insurance veterans




3. Partner with technology companies or other innovators

to create new services

• Carve out roles for yourself in new partnerships


Diversify business models

to move “beyond insurance”

Launch solutions addressing

customer–centric needs

& intentions

Be externally recognized

as a “go-to” market leader

“beyond insurance”

Make disruptive innovation

a safe reality




Launch Products & Services

• Conceive & test new & enhanced insurance products

and adjacent services

• Expand geographically with customer-centric insurance

products & services

Create New Market Solutions

• New strategies, models & solutions for unmet needs as:

– Risk shifts from people to technology & assets

– Human vs digital balance shifts from collaborative consumption

• Examples: autonomous drive, robotics, personal data economy,

nanomedical, neuroscience, “everyday advisor”




Recognized Innovation Leader

• Become a valued source of media comment & research

• Become a top-ranking innovation leader in self-disruption


Make Innovation Safe

• Anticipate risks in new markets

• Be a proxy for regulation

• Define a new risk vocabulary – terms & conditions

for disruptive technologies & advancements




New Diverse Revenue

• Increase market share from insurance products & adjacent services

• Revenue / equity from new offerings and ventures:

– Invest in start-ups (IP & patents)

– Use balance sheet / underwrite new ventures & exponential technologies

– Launch new market ventures & alliances


Threats abound, but so do opportunities

• Disruption is happening now

• Challengers & innovations are at the gates of traditional insurers

• Change is unavoidable

• A new regime of insurers can be at the center of the new

economy by proactively defining a new role for themselves

• This will require an unorthodox mindset

• But it could create an inspiring future

Date post:	16-Jul-2015
Category:	Business
Upload:	accenture-insurance
View:	481 times
Download:	0 times

Beyond Insurance: Embracing Innovation to Monetize Disruption

Business