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Data-rich, profit poor

Tapping the revenue potential of insurers’ data

OVERVIEW

As their traditional businesses are disrupted, U.S. insurance companies will need to find new sources of revenue or risk extinction. Leading insurers of the future will find ways to monetize their data and insights, turning it into revenue and competitive advantage. We estimate that data monetization could be worth $6-8 billion of new annual profit for the insurance industry—making up for a significant portion of the anticipated profit loss due to disruption.

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KEY FINDINGS

The U.S. insurance industry is at a tipping point. New entrants and new technologies are emerging that can mitigate or even avoid insurance loss.

  • All new vehicles sold in the U.S. will be connected by 2025.
  • Automakers will begin includinge insurance coverage with their autonomous vehicles, putting a dent in the insurance market’s eyes for carriers.

Yet many U.S. insurers already possess a significant weapon with which to win the battle for new sources of revenue. They hold vast amounts of data with unique insights that can be connected and enriched with external data sources to fuel new business models. However, traditionally, they have struggled to translate this information into profit.

Data flowing in is expanding exponentially from a broad range of sources. Monetizing it will be a key success factor for insurers. Yet, they risk being left out as other players are well-positioned to capture the opportunity. With increasing numbers of players seeking to capitalize on connected technologies, U.S. insurers cannot afford to hesitate.


Data monetization will be the new battleground for insurers

LOCAL EXPERT INSIGHTS

Evaluate the market and business potential

John Mulhall

Managing Director – Accenture Strategy, Insurance

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U.S. Auto Insurance Market Impact

The $250 Billion (DWP) U.S. Auto Insurance market is under considerable disruption. Projections of a 40-60% decline in market size over the next 20 years make finding new revenue sources critical for carriers. Data monetization is one of those revenue paths. Insurance carriers have data on how people live, what they insure and what they will likely insure in the future. This type of insight will be key to carriers unlocking the value in their data. How much is your data worth?

RECOMMENDATIONS

As traditional sources of revenue decline in the wake of digital disruption, U.S. insurers have an opportunity to turn their data and insights into new revenue and competitive advantage.


To capitalize on the opportunity, they need to:


 
Evaluate the market and business potential

Evaluate the market and business potential

Define use cases, data and insights to generate the business

Define use cases, data and insights to generate the business

Determine a go-to-market approach with appropriate partnerships

Determine a go-to-market approach with appropriate partnerships

Proactively develop innovation capabilities, including acquiring new skill sets and knowledge

Proactively develop innovation capabilities, including acquiring new skill sets and knowledge

Formulate an implementation approach with specific activities and initiatives

Formulate an implementation approach with specific activities and initiatives

 



With $6-8 billion of new annual profit at play, data monetization could be the path to survival under disruption.


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