Insurers have traditionally sought to develop new products and improve operational efficiency in order to remain competitive. Although they are still important elements in any business model, the market is changing so rapidly that these strategies alone will be insufficient to attract and retain future customers. Small and flexible insurtechs break the industry by developing or joining digital ecosystems, thereby threatening the market share of companies that are difficult to respond to. [suppliersusethedataasastrategytodeveloppartnershipsthatwillhavelong-termvalueandrevealnewopportunitiesfromexistingandpotentialpolicyholders
But ecosystems do not just happen. For insurance companies, one of the best ways to become an ecosystem company is to adopt open insurance. As my colleague recently wrote, "Open data platforms enable insurers to develop ecosystem companies and take advantage of their vast data resources."
What is "open insurance?"
Accenture defines open insurance as:
The exercise of insurers who share and consume data and services to create more attractive value propositions and new revenue streams. This data and services are exchanged with third parties both within and outside the insurance industry and are made externally available and openly consumable with application programming interfaces (APIs). Where applicable, customers authorize their service providers to make their data available, in exchange for which they expect better, more personalized services and experiences.
The good news for life insurance companies is the technology required to create an open insurance model already exists. These "ecosystem essentials" include an open digital insurance platform and clouds, supported by APIs ̵
What is needed is a business and technology strategy that connects insurers and policyholders to the platforms that deliver the value they cannot easily get elsewhere. In the case of Manulife, the strategy was threefold: (1) partners who can help them reach people outside their existing distribution channels, (2) partners who complement existing products and drive customer engagement, and (3) partners who provide additional capacity.
Shifting from "compensation and payment" to "protection and prevention"
Our vision for the life and annuity industry is already being developed in the real estate and accident industry, where insurers link policyholders to value-added products and services. , for example, monitoring devices that help prevent loss. The life and annuity industry must also move from a traditional compensation strategy to a preventive one. They must work with policyholders throughout the life cycle and provide them with more effective ways to promote longevity through healthier lifestyles that improve physical and mental well-being.
Clouds and connected systems, especially in health and well-being, are the value drivers for L&A. carriers as well as the forces driving the transition from payment to protect and prevent. This growing ecosystem has the potential to complement insurers' existing data courses with a good cycle of real-time health data – and our research shows that consumers are keen to share data in exchange for an efficient, secure and more personal experience.
The following diagram illustrates our vision for connecting ecosystem points to create a good data cycle that provides deeper insights to help insurers better understand how to protect policyholders with preventive products and services that encourage well-being.
This is not just a theoretical forecast. In our report "Open insurance, freeing up ecosystem opportunities for tomorrow's insurance industry", we found that insurers expect to generate half of the revenue or more from ecosystems over the next five years.
Whether you are looking for an opportunity to cross health and well-being, or if you are interested in growing your business in other ways, joining the ecosystem can significantly affect your revenue over the next few years. Let us talk about your plans to use ecosystems and help you give policyholders greater lifetime value.
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