Insurers: Go all-in on ecosystems
June 17, 2019
June 17, 2019
While disruption is rocking all industries, among the most vulnerable is insurance. Accenture analyzed 20 industries and found that insurance is the fourth most susceptible to future disruption.1
Disruption is putting immense value at stake. It has been estimated that by 2022, carriers that are slow to respond to changes by agile, hyper-relevant competitors could suffer market share erosion worth as much as US$198 billion.2 These “living businesses” adapt and innovate constantly—at speed and scale—targeting the most valuable parts of the insurance value chain.
More than half of insurance executives say their companies are already starting to experience disruption from competitors that have partners in other industries.3
Ecosystems are a major cause of this wave of industry disruption. Rather than becoming victims of it, insurance companies can join or design and execute their own ecosystems to ensure they are the disruptors, rather than the disrupted. Many insurers recognize this opportunity and are pursuing ecosystems as a strategic priority.
84%
Most insurance executives say ecosystems are important to their strategy
54%
More than half of insurance executives surveyed are actively seeking ecosystems
While many insurance companies are ambitious when it comes to building market-leading ecosystems, their capabilities don’t always line up. When we look at the attributes of companies excelling at ecosystems, less than five percent of the insurers were identified as ecosystem masters, the second lowest of all the industries examined.4
Insurers undeniably bring a lot to the table. The depth and richness of the data they have is unmatched. They have longstanding relationships with customers, which fosters trust, and they have incredible potential to conduct frictionless business by partnering with the right players.
Where insurers often fall short is in having the right capabilities, culture and technologies to fully exploit the ecosystem opportunity.
Insurance lags on the Ecosystems Capability Index, measuring the ecosystem capabilities of companies across six dimensions
As they pursue market-leading ecosystems, insurance companies will need to carefully assess their readiness and close the gaps—cultural, technological and other—to ensure they are an effective ecosystem player and the type of partner others are seeking.
Insurers want a seat at the ecosystem table, but they must be careful about selecting who joins them there. The right partners—and partnership savvy—allow an insurer to successfully collaborate outside of its core business and achieve economies of skill, scale and scope:
Skill: Insurers can gain access to a wider range of skills, capabilities and technologies they would not otherwise have had, ranging from customization and personalization, to facial recognition, machine learning and digital marketing.
Scale: The right ecosystem partners bring greater size, reach and cost advantage. For example, a partner with scale may have vast amounts of data that can be used to inform better customer insights and experiences.
Scope: Insurance companies can expand their customer value proposition with the help of ecosystem partners whose capabilities can extend the variety of their offerings and introduce new services.
Ecosystems will change both the products/services offered and how companies go to market.
view the infographic1 Disruptability Index, Accenture, 2018.
2 Insurance as a living business, Accenture, 2017. Cornerstone of future growth: Ecosystems research, Accenture Strategy, 2018.
3 Cornerstone of future growth: Ecosystems research, Accenture Strategy, 2018.
4 Cornerstone of future growth: Ecosystems research, Accenture Strategy, 2018.