Insurance carriers globally could generate US$375 billion in new revenue in the next five years by transforming and revitalising their businesses, according to a new report from Accenture.
The report, “Insurance as a Living Business,” found that insurers that continuously innovate and adapt to changing customer needs will be able to capture emerging growth opportunities and outperform competitors.
- Emerging risks like cyber security and autonomous vehicles;
- Improved penetration of markets that until now have been difficult to profit from;
- Value-added services that help reduce customers’ risk, such as connected devices in homes to detect maintenance issues before they cause damage;
- Expanded business partnerships, both within and outside of insurance, to create more-personalised offerings for consumers;
- And the monetisation of assets such as data, platforms and algorithms.
Another US$198 billion in new revenue represents the potential shift in market share within the five key areas, favouring insurers who embrace transformation at the cost of less-responsive competitors.
“The insurance industry as we know it is at the edge of a new business environment,” said Michael Costonis, who leads Accenture’s Insurance practice globally.
Projected Revenue Opportunities
The report recommends several steps that insurers can take to amplify growth opportunities. These include developing an enterprise-wide digital strategy that embraces new models and new technology – including artificial intelligence, blockchain, smart contracts and the internet of things – to offer more-personalised and faster services, and harnessing the treasure trove of customer data already in their possession to better customise their offerings.
“Maintaining the business status quo is unsustainable,” Costonis said.
“Insurers’ profits and revenues are under pressure as insurtech startups proliferate and technology companies with strong personalised customer relationships circle the industry. Innovation – beyond aggregators and online distributors – must be an industry priority. Carriers that make the right business changes, understand their customers, and respond to them rapidly and fearlessly with relevant, innovative offerings will be more likely to increase market share and capitalise on the new emerging opportunities.”