Insurers are eager to create or join business ecosystems to promote growth amid industry disruption – but few insurers are currently in a position to succeed with open insurance, according to a new study by global professional services company Accenture.
Accenture’s study, which surveyed more than 1,250 business leaders, found that 84% of insurance executives acknowledge that ecosystems are important to their business strategy. More than half (54%) are actively seeking partnership opportunities external to their firm. But despite their enthusiasm for open insurance, insurers are falling short when it comes to the capabilities, cultures and technology necessary to fully exploit ecosystem opportunities.
“Insurers have to decide whether they want to be the disruptors or the disrupted,” said Michael Lyman, a senior managing director who leads Accenture Strategy in North America and its insurance practice globally. “Joining or designing market-leading ecosystems will enable insurers to ride the disruption wave instead of being swept up in it. But this requires a scrupulous self-assessment of their ecostystem capabilities to determine any organizational gaps that will prevent them from being effective ecosystem partners.”
Accenture found that the vast majority (97%) of insurers believe they can be attractive ecosystem partners. The next step, Accenture said, is for insurers to develop a clear strategy to either reinvent or disrupt the existing insurance value chain to improve their competitiveness. That means closing gaps in culture and technology and choosing the right partners, Accenture said. The report also stressed that insurers needed to prioritize the security of their ecosystem partners.
“Ecosystems offer an exciting new way of competing, and insurers are at the beginning of their journey to develop an ecosystem strategy,” said Daniele Presutti, head of Accenture’s insurance practice in Europe. “While much work remains to be done to fill the gaps between their intentions and executions, insurers recognize the challenge and see that the potential to alter the insurance value chain is significant. Embracing the concept of open insurance through a platform-based approach will require new forms of collaboration with players from within and beyond insurance that can share data and expertise to create new services that address customer needs. Insurers should be fearless, take the offensive and embrace these platforms.”