beyond insurance: embracing innovation to monetize disruption
TRANSCRIPT
Copyright © 2015 Accenture. All rights reserved. 1
Digital Transformers in the insurance
industry are looking beyond insurance.
They are optimizing their current business
& operating models where possible.
But they also seek to reinvent themselves
by innovating & diversifying their capabilities.
Introduction
Copyright © 2015 Accenture. All rights reserved. 2
Among the potential capabilities
are two important growth options.
1. Work closely with technology innovators to make
new products & services safe realities
Lloyd’s of London, centuries ago, helped transform the
risky shipping business into a global industry
2. Become trusted advisors to customers
Like a “life coach” who helps them manage
the complexities of their lives
Competitive threats are forcing
change – insurers need to take
swift action.
Copyright © 2015 Accenture. All rights reserved. 3
A host of challengers, technologies & consumer
trends have become real threats:
An industry at risk
Core products are often viewed as
undifferentiated commodities
• 21% of consumers believe insurers are
“the same in terms of offerings & services”
• Two-thirds would consider buying insurance
from organizations other than insurers
Copyright © 2015 Accenture. All rights reserved. 4
A host of challengers, technologies & consumer
trends have become real threats:
An industry at risk
New competitors are coming from
across industry lines.
• Google is licensed to sell insurance in the US,
provides auto & travel insurance quotes in the UK
• Walmart, IKEA & several mobile phone companies
provide insurance distribution
• Almost two-thirds of insurers believe external
players like online service providers & aggregators
will enter insurance distribution by leveraging their
digital capabilities
Copyright © 2015 Accenture. All rights reserved. 5
A host of challengers, technologies & consumer
trends have become real threats:
An industry at risk
Technology innovation will make some aspects
of insurance obsolete through shifting risk pools
• Autonomous cars will shift coverage from people
to machines—from personal to commercial
• Liability premiums are projected to decline by 20%
until 2018, then by 80% from 2018 to 2022
Most insurers are investing only in their current business model.
Those that understand the disruption are repositioning themselves
& pursuing growth options to move beyond insurance.
Copyright © 2015 Accenture. All rights reserved. 6
Transforming innovations & disruptions into safe realities
Option 1
Insurers should help make disruptive commercial
& technological inventions safe realities
• The horseless carriage would not have become
commonplace without insurance
• Advances in big data, robotics, nanotechnology,
genetic engineering & artificial intelligence have
the potential to transform our lives – but society
needs protection
• Someone needs to put moral & ethical bounds
on these inventions
• Insurance served as a proxy for & enforcer
of regulation—and can do so now
• Technology innovation offers significant
growth potential for insurers
– In Europe, “connected insurance” is forecast
to generate $19 billion in non-life premium
income in 3 years
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Inventing & delivering trusted advisory services
Option 2
• As technologies & societies change, so do consumer needs
• Insurers have the potential to become embedded as a “life coach”
– A positive part of their customers’ daily lives
– Offer frequent, highly personalized advice
– Become a hub, aggregator or concierge, bringing together offerings from
a variety of related providers
– Address an increasingly higher percentage of individuals’ & corporations’
needs & intentions
Copyright © 2015 Accenture. All rights reserved. 8
Inventing & delivering trusted advisory services
Option 2
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Three steps to to making the leap to new growth curves:
Generate a new era of growth
1. Create a “red team”
• Risk-averse culture, large-scale governance & time-consuming
processes will thwart most carriers’ efforts to transform the business
model within their four walls
• Need a separate entity to detect customers’ new needs & intentions,
create new services, cannibalize the business where necessary
• Foster a different approach to innovation, different metrics,
& a cross-industry, co-invention mindset
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Three steps to to making the leap to new growth curves:
Generate a new era of growth
2. Transform to a human-centric culture
• Move to the same side of the table as customers
• Address a steadily increasing part of their daily needs
through new ecosystems of services
• Think outside the box – best ideas are more likely to come
from anthropologists & sociologists than insurance veterans
Copyright © 2015 Accenture. All rights reserved. 11
Three steps to to making the leap to new growth curves:
Generate a new era of growth
3. Partner with technology companies or other innovators
to create new services
• Carve out roles for yourself in new partnerships
Copyright © 2015 Accenture. All rights reserved. 12
Diversify business models
to move “beyond insurance”
Launch solutions addressing
customer–centric needs
& intentions
Be externally recognized
as a “go-to” market leader
“beyond insurance”
Make disruptive innovation
a safe reality
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Diversify business models
to move “beyond insurance”
Launch Products & Services
• Conceive & test new & enhanced insurance products
and adjacent services
• Expand geographically with customer-centric insurance
products & services
Create New Market Solutions
• New strategies, models & solutions for unmet needs as:
– Risk shifts from people to technology & assets
– Human vs digital balance shifts from collaborative consumption
• Examples: autonomous drive, robotics, personal data economy,
nanomedical, neuroscience, “everyday advisor”
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Diversify business models
to move “beyond insurance”
Recognized Innovation Leader
• Become a valued source of media comment & research
• Become a top-ranking innovation leader in self-disruption
to move “beyond insurance”
Make Innovation Safe
• Anticipate risks in new markets
• Be a proxy for regulation
• Define a new risk vocabulary – terms & conditions
for disruptive technologies & advancements
Copyright © 2015 Accenture. All rights reserved. 15
Diversify business models
to move “beyond insurance”
New Diverse Revenue
• Increase market share from insurance products & adjacent services
• Revenue / equity from new offerings and ventures:
– Invest in start-ups (IP & patents)
– Use balance sheet / underwrite new ventures & exponential technologies
– Launch new market ventures & alliances
Copyright © 2015 Accenture. All rights reserved. 16
Threats abound, but so do opportunities
• Disruption is happening now
• Challengers & innovations are at the gates of traditional insurers
• Change is unavoidable
• A new regime of insurers can be at the center of the new
economy by proactively defining a new role for themselves
• This will require an unorthodox mindset
• But it could create an inspiring future