The insurance playing field will look dramatically different in a digitally connected future. Sweeping changes across consumer behavior, technology innovations and big data are reshaping traditional insurance business models and what it takes to compete.
The most successful insurers (expecting growth of 5-7 percent) are the ones that will adapt proactively as the playing field and rules of competition evolve.
Explore three ways in which insurers can step up their game to boost competitiveness.
At the same time, the growing importance of Big Data is playing to their sweet spot. CFOs are looking to integrate increasingly rich data about markets, sales, customers and internal operations to identify opportunities to accelerate growth and enhance profitability.
The value at stake is substantial as erosion of the traditional insurance business will make it challenging for insurers to maintain competitiveness.
In considering their strategy, insurers need to weigh both what they stand to lose from their existing business, and the opportunity potential they will miss out on if they fail to respond. Carriers need to move at speed to protect their current profit pools and capture new opportunities.
Forty-four percent of carriers believe that new competitors from outside of the industry will take 2-5 percent of market share in the next three years, with 10 percent expecting them to gain between 5-10 percent in market share.
No single move will guarantee competitiveness, but there are definitive actions that better position insurers for the future.
Bolster your defense to protect the core
Move to flexible, transactional systems, digitize functions and build a data structure to capture insights.
Expand your playing field
Customer needs are defined by desired outcomes—so look for ways to expand insurance offerings to deliver those outcomes.
Build out your team
Insurers must consider becoming part of an ecosystem of providers that is able to meet more of their customers’ higher-level needs.