Disruptability index for Insurance
May 10, 2018
Insurance leaders today often think disruption is beyond their control. While 93 percent of executives across industries say they know their industry will be disrupted at some point in the next five years, only 20 percent feel they’re highly prepared to address it.
However, Accenture research shows that disruption follows a discernible pattern. To better understand the nature of disruption in an industry context, we created the Disruptability Index and an infographic to highlight the insurance industry’s vulnerability to disruption.
For the Disruptability Index, Accenture analyzed 3,269 companies—across 20 industries and 98 industry segments—and looked at 15 contributing variables.
Insurance is the 4th most susceptible to future disruption out of the 20 industries analyzed; however, current levels of disruption are very low leaving insurers complacent. Those that plan for the future of disruption will obtain competitive advantage.
We think not. Insurers who act today to address structural productivity challenges in their core business will be well positioned to keep disruptive competitors at bay.
Rather than being a random event beyond a leaders’ control, disruption has a pattern that can be identified, understood and prepared for. By measuring the current level of, and susceptibility to, disruption in over 90 industry segments, we identified four periods of disruption: Durability, Vulnerability, Volatility and Viability. Where incumbents fall within these periods should inform how they respond, with confidence:
Disruption is not unpredictable, beyond your control or something only the weak should respond to. In periods of rapid change, a new strategy is required: one that enables insurers to act in the face of disruption, confidently. We call this strategy ‘rotating to the new’.
In the Vulnerability period, where high barriers to entry endure, it is time to scale up new opportunities while strengthening operational efficiency and innovation commitment. There are three key steps to consider:
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