Insurance Ecosystems: The Ultimate Comprehensive Guide to Understanding and Navigating Modern Insurance Ecosystems Effectively

The analysis by Accenture of 18 sectors shows that insurance Ecosystems sector is particularlym vulnerable to disruption. When Disruptability Index study was completed it was afflicted by lowest level of disruption but was ranked 4th for its vulnerability to disruption. In present it is clear that amount of disruption increased significantly. This is only beginning. industrys susceptibility to disruption has also increased.

The reason is simple. Insurance is among top proportions of cost of labor to price. This means theres lot of untapped value within value chain of insurance.

Since 2013 research by Accenture forecasts that all companies that is in insurance industry along with other industries is required to transform itself into one that is digital. Today in world that is increasingly connected majority of consumers conduct their lives on internet. Their assets are on internet.

theyre familiar with online services specifically tailored for them. Theyll be expecting you to know person they are what they require & time they require it. Theyll establish high standards in terms of service quality & demand that you be easy to do business with. In addition they will be aware of an understanding that definition of risk is evolving in same way that companies tailor & provide insurance experience to their clients.

The world is likely to change & way that insurance companies have followed for last 20 years wont be one they will follow over coming 20 years. Change is bound to grow & grow. Insurance managers therefore should not be able to afford complacency.

New technologies are potential or threat?

Innovative technologies ranging such as artificial intelligence to massive data are expected to change way insurance companies operate. This is no surprise because nature of insurance is data  IT  & intelligence intensive. One of most interesting (and likely disruptive) advancements are found at crossroads of these emerging technologies. They come together to create innovative differentiated & integrated advantages. This can be seen clearly in gray ellipse of image below.

It is exciting for consumer as it opens up prospect of an all inclusive insurance plan that includes everything from risk prevention to risk prevention & advice as well as wider range of offerings. In addition theres an increasing trend of companies with insurtech joining existing infrastructures for insurance & leveraging existing carriers customer bases & databases offering their customers attractive new business benefits as result. Insurance businesses both traditional & modern are forming networks to deal with any disruptions that could occur in market in near & distant future.

If insurance companies dont invent & adopt new technology & methods to collaborate with other stakeholders emerging technologies with every version could become major cause that can cause disruption.

What are ways insurtech companies are changing game in insurance?

There are several ways that insurtechs utilize cutting edge technology to change current world of insurance. cases of Extract & Flock illustrate this disruptive change by demonstrating:

Xtractidentified as problem in industry of insurance. process of processing claims was drop down menu without information from client & claims manager to make an important & costly decision without suitable information. Xtract utilizes intelligent AI to recreate visually instances of insurance which includes ability to place images on Google maps drop pins on them & then select area of damage to generate visual representation of what occurred. Additionally company has also launched self service so that customers can access their phone to recreate event in front of claims manager. process takes just few minutes & produces single final decision to make. Based on earlier trials using top five insurers who have an average of 300000 claims per year this system could reduce cost by more than 40 million dollars annually by cutting down on calls from third parties telephone calls & other.

Flock was founded with intention of measuring complicated risks in real time through ingesting of real time information from numerous sources. result is an instant precise knowledge of risks involved & any losses that may be incurred as result. company was born in field of drones seeking to comprehend risk of drone flights in real time. If for instance customer has to fly drone from one point to another they could enter pertinent details pertaining to variables like weather conditions & where they are. On basis of this information Flock developed an analysis platform for risk for estimating & pricing that risk.

The data driven models give firm an advantage over insurers who have difficult time estimating risk of certain activities of assets or businesses which havent existed for that many years but with comparatively limited historical data. In end Flock rates its drone insurance on minute basis & sells it per hour & provides customers with choice of purchasing it via their phones. company has also launched an array of products that are flexible which include liability insurance as well as coverage for enterprises as much as PS25 million for damages.

that is targeted towards drones that are operated by biggest drone fleet operators in world such as Atkins as well as BBC. Since it was launched in year 2018 it has seen rapid growth in past year & now it assists thousands of users fly safely & more efficiently. success of business is helping it to grow into new areas tap into an array of information driven risk management tools within drone sector that range from on demand insurance app designed for micro SMEs & an exposure based product for enterprises that is used by worlds biggest drone fleets.

What can insurers do to help insurtechs collaborate?

The rise of variety of companies offering an array range of services & solutions offers real opportunity to incumbent insurers to be innovative with collaboration. Insurtechs that are starting out often lack in traditional expertise of insurers & carriers benefit of different skills & perspectives new methods of harnessing technology & new perspectives on new & traditional sectors of market.

If given opportunity they have insurance companies excel when it comes to unlocking vast amount of information available & capitalizing on their vast market presence. It allows startups to use their tech in ways which would be impossible without benefit of insurers. Insurance companies can give insurtech companies capacity to connect gap between traditional & modern.

What exactly is an ecosystem?

The worth of well functioning ecosystem is higher than value that every participant would have ability to add or leverage basis of.

A network is made up made up of people whether within or outside field working in concert to design develop & implement market oriented consumer & customer centric solutions. successful ecosystem is defined by extent & depth of possible collaboration between participants. Each participant contributes to an important aspect or ability that is part of solution for consumers. value of an ecosystem is in its interdependent character. Each player does not have to control or manage each component of solution. In end capabilities of various players in ecosystem increase & allow overall worth of entire ecosystem to exceed sum of contributions of players individual merits.

Whats difference between an ecosystem & partnership?

A partnership is type of business that has participants who share same commercial interests. term “ecosystem” describes wider tale in which all participants are bonded by goal of not only getting competitive advantage  also to disrupt marketplace by creating new possibilities that arise through alliance.

What are effects of ecosystems on insurance business?

According to Accentures latest research nearly half of insurance executive (51 percent) that we interviewed said their businesses are starting to feel some kind of disruption from rivals that collaborate with companies in different industries. disruptions are affecting those areas that are most crucial to value chain. In case of insurers they have reported most disruptions in goods & services (60 percent) as well as customer experience (57 percentage).

In event that insurers do not create their own networks in order to create their own ecosystems they are at possibility of being restricted to position of sole risk insurance service. other players could then be better placed to serve an even more complex & more valuable experience for customers to establish their own brand as well as to manage relationship with their customers.

Strategies for tackling disruption may differ between companies business its clear that when carriers actively design or manage their own systems that they are able to assure that theyre disruptors rather than one being affected. lot of insurers who have grasped this potential have already set themselves to maximize potential value & confront disruption head on.

Ecosystems can be significant cause of disruption to industries. What do insurers have to be waiting for?

Nearly 4 in 5 of executives from insurance who we talked to agreed importance of ecosystems in companys strategy. 54% said they were actively looking for ecosystems. Of all sectors Accenture studied amount of enthusiasm exhibited by insurance sector was among highest. Although insurance companies may recognize importance ecosystems as driver to change positive outcomes they do not have capacity to execute concept of ecosystems in their operations.

Just five percent of insurers could be classified as ecosystem masters.

Seventy seven percent of insurers polled believe that they have attributes they need to make an appealing ecosystem partner  their goals & abilities arent always in line. In analyzing characteristics that companies have succeeded in establishing ecosystems just five percent of insurance companies could be described as “ecosystem masters. When they are able to master art of ecosystems & their components insurance ranks in bottom tier of various industries that were studied.

What are benefits that insurers can contribute to context of an ecosystem?

Insurance companies can be crucial & valuable part of ecosystem. Insurance companies have access to data supply channels distribution networks & innovative methods that many tech startups are aspiring to emulate. Theyve got decades sometimes centuries of industry know how & an institutional understanding of complex regulatory framework. Because of this insurers can more than making disruption an opportunity when they work with right partners.

Insurance companies have unparalleled depth & wealth of information at their disposal which allows it to offer additional an extremely personalized & focused service. Insurers dont only provide additional knowledge but also regulatory capabilities that allow it to sell insurance across multiple geographies  something that technology company for example does not have. They also have long standing relationships with its customers & an established record of confidence. Through partnering with trusted companies insurance firms can use this expertise to increase possibility of frictionless business.

In terms of ecosystems where do insurance companies fail?

In event that insurers could be as an asset to ecosystem then where are they failing currently? Our research suggests that problem lies with capability in culture technological & resources. If these challenges are addressed insurance companies can take advantage of potential of ecosystems.

Insurance management executives agree that technology is primary aspect to be able to integrate into ecosystem. Analytics internet of things as well as other advanced technologies such as artificial intelligence transform insurance. Yet business in general is not far ahead in its adoption. Indeed many insurers which have embraced siloed technologies did not realize benefit through investments. What is needed is to make process more interconnected. When insurance companies seek leading ecosystems in market & ecosystems theyll not just have to be able to assess their ability but also fill in gap in their technology culture & morein order to assure theyre an efficient eco system player & also kind of company that others want to partner with.

What should I consider when I am defining my eco system?

Whatever sophistication of an organization is ability to harness proper ecosystem building capabilities is not an assurance. Assess your businesss willingness to join an ecosystem in addition to determining purpose & scope of your ecosystem through these inquiries:

• How can I make my experience an experience that is better?

This is question that focuses upon your interactions with customers. Are you able to learn more about your customers & what they are looking for as well as price theyre ready to spend way they would like to interact with your company & way they would like to be served following that transaction? most important thing is can you determine method to alter customer experience & to do it in large scale right today at moments notice.

• What can I do to boost decision making talent I already have?

This is question that requires business owner to think about how your choices will positively affect risks that your business is taking on market what you charge for your product in marketplace & perfect way to accomplish this with your experience & information that youve gained through years in addition to fresh sources of information.

What can I do to be desirable ecosystem to potential partner?

Making decision to open your business open to potential ecosystem partnerships isnt just about ways other companies can help your business but also what advantages & abilities your company brings to marketplace. It is possible that ecosystem doesnt care about your companys success should you be attentive to your ecosystem partners & then respond by providing capabilities they require & can bring you will be more attractive for investment. It is possible to assess your companys appeal & potential to become an ecosystem partner or connect by asking yourself these questions:

1. What can my business do to distinguish itself in crowded marketplace?

What can your company provide potential partner as condition for them to join with you?

1. Do my prospective partners have some specific needs that my company could address?

If you are listening to possible ecosystem partners its very likely that theyll come up with new idea youve never ever thought of. They see your company from other perspective & will bring fresh options & suggestions that will be beneficial to all involved.

What is an “ecosystem master”?

To define what it means being an ecosystem master Accenture looked for businesses that were able to do three of following things correct:

1. The company aims to disrupt business with ecosystems.
2. Plan to manage in as many ecosystems as is can be.
3. The goal is to actually achieve 5 percent or higher increase in their growth via ecosystem wide initiatives.

What are ecosystems that can benefit companies to invent?

If insurance companies invest time as well as capabilities technologies & funds to implement strategically designed ecosystems within their operations & reap benefits. Think about these instances:

South African health insurer Discovery is making great progress in achieving maximum benefits of its Shared Value Insurance business model. Discovery has joined forces with top insurance companies throughout world each of which integrates its Vitality platform into their business plan. Vitality platform received praise from customers due to its advantages & benefits but Discovery is certain that its platform could benefit boost wellbeing of 100 million individuals around globe.

The Generali Group based in Italy has introduced home insurance policy which integrates smart home technologies offered via Nest Labs (a Google Alphabet group business) along with services it offers to safeguard its customers their homes. In particular Nest Protect technology can detect carbon monoxide & smoke & alerts clients mobiles. partnership provides added value to consumer as well as reduces risk to Generali as an insurance company. As part of strategy to incorporate technology such as Internet of Things (IoT) & digital ecosystems Generali

• It was founded Jeniot is business that offers innovative IoT as well as connected insurance solutions for urban mobility smart homes health & connected workplace.
• The company was founded in Welion is an integrated welfare firm which specializes in health & wellness ecosystem.
• launched campaign in Italy named Call to Growth that aims to create collaborations with start ups that are innovative from field.

Chinese insurance company Ping An Insurance has utilized ecosystems as an integral part of its plans to create an all in one source of provision of health financial & other services. By holding majority stake in Autohome that dominates automobile sales online & is able to collect valuable information & gain its foothold in field of autonomous vehicles. housing & investment market Haofang boasts dozens of real estate developers as well as over 12 million active customers. Ping An is leveraging this network to generate new revenue streams by offering distribution of its financial products including mortgages & wealth management products & related products. Additionally Good Doctor platform connects large network of hospitals & has put together massive medical team including around 900 who are dedicated to offering 24/7 consultations online to 77.5 million people. entire ecosystem can generate an estimated $480 million annually in revenues that in year 2018 was up 78.7 percent in comparison to prior year. In conjunction these platforms set company for wide & subtle growth in insurance industry.

The power behind Ping Ans ecosystems lies in fact that although they are able to cover wide range of areas They also work energetically to meet wide range of needs for customers & in achieving companys overall purpose.

What can insurance companies do to select best ecosystem to partner with?

While insurers might want to have an opportunity to sit at at table they should choose carefully people who are invited to join them. If an insurer has good understanding when it comes to selecting & engaging with appropriate allies it can successfully cooperate outside of its primary operation & achieve efficiency in skill scale & scale.

Insurance companies should seek out providers who can give them access to wider array of skills as well as capabilities that they might not be able to access including individualization customization & digital marketing.

Scale  The most effective ecosystem partners offer larger scale & greater reach. As an example company who is scaled may be able to access huge quantities of information that could help to improve customers experiences & customer insight. Many of most profitable ecosystems have efficient data aggregators that have clearly defined strategies on sharing & leveraging data to serve accurate interests of everyone involved.

Scope   Insurance companies should choose right ecosystem partners to benefit to expand their value offer. good partner must be able to provide capabilities to expand scope of their offerings & offer new offerings.

What is foundation of an ecosystem that is successful?

There are many factors that contribute in long term growth of ecosystems primary element of an ecosystem that is successful is trust. trust of person can be difference between sustaining or breaking an ecosystem. Any trust breach that involves an individual can affect whole ecosystem. seemingly soft characteristic is actually financial burden.

According to Accenture Competitive Agility Index showed that more than fifty percent (54 percent) of 7000 businesses that were analyzed experienced significant reduction in trust at some time in last two & half years.

If significant decline in trust happens on average insurance companies experiences an 2.6 percent decrease in growth of revenue as well as company will experience 3 percent EBITDA growth decline. In instance for business worth $25 billion that is an improve of $650 million in revenue growth & equivalent of $750 million EBITDA growth reduction.

What are ways that insurers can play to be successful in marketplace?

The time has come for insurance companies to get involved & develop an ecosystem that is market leading with trusted allies. Heres how:

1. Play game of shaping market

Innovative insurance companies will start their journey through ecosystem with no nonsense strategies that are that is based on following issues:

• What are their goals to have in their customers lives?
• How daring will their ambitions How bold will their aspirations
• What market will markets game?

Accenture has seen three significant markets within industry of insurance improving value chain in order to transform way we think about & experience our customers; bringing an value chain from end to end is disrupted in which insurers are able to make money from ecosystems by leveraging market adjacencies as well as reimagining most valuable aspects in value chain developing new “living business” strategies that produce significant revenues beyond their core business. With solid strategic goal established winning insurers can define goals business case prioritization & roadmap for their particular market play(s). plan should outline how ecosystem is going to develop to launch scale & expand ecosystem offerings services & products.

1. Have look at mirror

Insurers are able to become effective ecosystem partners when they start with thorough examination of capabilities of their ecosystem. Carriers should examine their strengths in terms of culture technology & even their own culture in order to identify gaps that require attention or assets that could be tapped for purpose of becoming an appealing ecosystem partner. analysis must be guided by vision of business as well as its strategy & plans.

1. Select your preferred partners

The most reputable insurers choose most appropriate ecosystem partners to assist in development of their market. Theyll look for companies with assets such as domain expertise technical capacities to benefit support their strategy for sustainable ecosystem. strategy should be built on an environment of collaboration trust & focus on customer & will benefit each partner actually achieve their desired position. If both parties have same policies & procedures for security & governance standard result is likely to be distinct & increase confidence.

How do I connect customer to my environment?

Ecosystems could play an essential part for insurers who want to be more attentive to customers. An overwhelming 91 percent of customers Accenture interviewed said that satisfaction of customer is crucial. If you want to leverage your network to benefit of your clients take look at frequency you talk with them messages youre saying to them & channels you are using to connect with your customers.

Marketings function is changing for marketers. interaction that marketers have with their client is driven by constantly changing data driven orchestration that runs behind scenes which contributes to this relationship. Based on our experiences weve found that benefits of ecosystems are realized in event that interactions are supported with appropriate information. It is important to know way your customers interact with digital resources you offer in order to modify & customize way they interact by personalizing every interaction point as much as is it is possible. There arent any shortcuts to take & if you take time to analyze good as well as poor youll be able to comprehend your customers & modify ecosystem to meet their needs.

What role will blockchain play in ecosystems?

Blockchain has been improving & is revealing capabilities that we didnt have prior to. Over last two years Accenture Digital has proven capabilities of blockchain in situations that werent thought of when it was first introduced to year.

Blockchain technology used utilized by Australias Stock Exchange Australian Stock Exchange proved that it is possible to process transactions in equities market in real time & at an amount thats needed for support of trading on exchange. This year in Singapore in year 2012 first time ever..

Accenture Digital proved that we can have four blockchains working together to perform cross transactions across blockchains. This proved that interoperable blockchains can be achieved. When insurers & their networks evolve & take advantage of technology accessible its clear that technology is getting better. Blockchains impact on ecosystems is just beginning to be studied in process of discovering more.

A good illustration of how blockchain technology can create new efficiencies for insurance companies.

Accenture as well as Generali Employee Benefits (GEB) have recently launched unique blockchain technology to employees benefits industry. Blockchain technology can build stronger more connected network between all parties. It creates safe efficient integrated method of transfer information. This is particularly relevant to insurance industry since blockchain technology can speed up procedures for insurance that are manual.

The participants in process of reinsurance to pool or captivity services can access exact data at any time throughout entire business. Process errors are minimized through strategies like automated reconciliation process & smart contracts. They can be executed on internet & are visible to entire population of users of blockchain. In 2018 two world customers of Generali Group one that is Syngenta which is leading agricultural business  and regional insurers from Spain Switzerland & Serbia have successfully tested model of specific solution. This demonstrated its importance to marketplace.

What can insurance companies do with Accentures “wise pivot” to gain from ecosystems?

There is no doubt that insurance companies must change to be able to offer outcome & be ready to be ready for next generation of insurance. Ecosystems can be ideal tool for this as collaboration allows businesses to implement innovative processes technology information or even capabilities quicker than they could by themselves.

If you are business you are able to boost your performance in regions you want to expand broaden your geographical reach as well as change or defend your business. In end in order to be an attractive partner in ecosystem & to embrace latest technology it is necessary to make change to more modern. Benefits are both sides of coin when you have right ecosystem in place. It can act as catalyst to your companys smart pivot & will allow you to earn value of innovation through.

Insurance companies must drive tough & continuous & continuous. process of transformation is ongoing which requires agility as well as constant improvement.

Our model of wise pivot proposes 4 pronged plan. In first place you must transform fundamental of company to push an boost in investment capabilities. Third you must expand business core to provide engine for growth. Thirdly expand company as you discover as well as expand into new growth areas in timely manner.

Fourth make smart pivots to maximize investment funds as well as capital over time as well as adjusting to innovative business models & strategies in appropriate time.

Successful wise pivots should be accompanied by fresh method of organizational transformation that is known as transition towards new. When you have this plan in place & in place youll be placed to boost & expand your existing business while expanding new ventures in tandem.

A Case Study of Wisdom Pivot working

In our most last Digital Insurer Network meeting Mike Sutclif Group Chief Executive Officer of Accenture Digital shared most common traits of companies who have successfully shifted their focus to future. This was achieved by taking these actions:

1. The first step was to warrant that top leaders agreed on goals of their work. It was basis for all pilot & prototype activities within company. It was top down initiative rooted in an understanding of reasons it was necessary to incorporate latest technology & how it was to be carried out.
2. Technology integration & management of business happened in parallel. People who were successful in scaling did not remove them from main business & separate new from older. They provided team that was piloting innovative technology ability if pilot was successful on scaling it within organization. This personal connection as well as responsibility for oneself made all impact.
3. The team of leaderships leaders have invested in foundation as well as infrastructure needed in order to allow expansion to be achieved prior to completion of pilots.

The companies were eager to try failure experiment study & accelerate their progress & all this was supported by strategic thinking & support of management.

My Suggestion

To prevent value loss & warrant an ongoing relevance In order to avoid value loss & warrant relevance for future insurance Ecosystems companies must become disruptors prior to being interrupted themselves. 

In todays highly competitive environment they are unable to do on their own. When companies focus on requirements of their customers & choose best number of ecosystem partners that fulfill these needs They will gain distinct combination of abilities information customer data as well as industry expertise that can help their businesses innovate.

 

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