Play to win in the ecosystem
Accenture analyzed 20 industries and found that although insurance is currently experiencing a low level of disruption, it is the fourth most susceptible to future disruption. Ecosystems are a major cause of this wave of industry disruption. Insurance companies can join or design and execute their own ecosystems to ensure they are the disruptors, rather than the disrupted.
More than half of insurance executives (51 percent) say their companies are already starting to experience some form of disruption from competitors that have partners in other industries. These disruptors are targeting the most valuable parts of the value chain. Insurance incumbents see the highest levels of disruption in the products and services offered (60 percent) and the way customers are serviced (57 percent).
Most insurance executives (84 percent) say ecosystems are important to their strategy and more than half (54 percent) are actively seeking ecosystems the highest of all the industries that Accenture Strategy surveyed. Yet many insurers don’t have what it takes to lead an ecosystem. So what’s an insurer to do: Play it safe by conducting business as usual, or go all-in to seize the ecosystem opportunity?
Three steps to ecosystem mastery
Insurers need to offer consumers a wider, more relevant and appealing set of offerings and experiences, but they can’t do it alone. The right partners can bring the skills, scale and scope necessary to help incumbent insurers lock in on a profitable ecosystem opportunity. Here’s how to make a successful ecosystem play:
- Shape the market play
Forward-thinking insurance companies will set a clear ecosystem strategy: What role do they want to play in customers’ lives? How bold will their aspiration be? We see three major market plays for insurance:
Next, winning insurers will define the vision, business case, priorities and roadmap for the market play(s). The roadmap should outline how the ecosystem will incubate, launch and scale ecosystem propositions, products and services.
- Improving the existing value chain: Insurtechs/fintechs are being recruited around the core business to reshape economics and experiences.
- End-to-end value chain disruption: Insurers can look to monetize the potential of ecosystems through market adjacencies.
- Reinvent the highest-value aspects of the value chain: Certain segments are looking at creating new living business models that create major revenue outside of their core business.
Take a look in the mirror
Successful insurance companies will scrupulously take stock of their capabilities, culture and technology to identify the gaps they need to address and the strengths they can leverage to be a fully contributing ecosystem player. In doing so, their vision and future market priorities should inform the way forward.
- Pick your partners
Forward-looking insurers will carefully select the partners required to deliver on the ecosystem strategy. Depending on the chosen market play, they will seek partners that bring the assets, domain expertise or technical capabilities required to implement the market play.
Beyond these dimensions, potential partners should also have the right ethos, collaboration, customer focus and incentive to complement each other’s desired positioning. And if partners have similar governance and security processes and standards, the combination will be differentiating and will breed trust.
How can insurers disrupt their industry using ecosystems? Read our report Insurers: Go All-In On Ecosystems, to learn more.