In the midst of the economic turmoil of 2020, we have heard a great deal about price adjustments on existing insurance products and about product innovations aimed at addressing new risk areas.
When the COVID-19 recession tests the resilience of their balance sheets and catastrophic event claims increase, insurers pull their business leverage in response. But are the levers they reach the right ones for?
In our latest report, Where & # 39; s the Payback on Digital Innovation in Insurance, Jean-Francois Gasc and I examine five categories of digital innovation to determine which of them provide the best return on investment. We found that leading insurance companies were more likely to invest in customer-oriented digital innovations ̵
Our analyzes were based on data from Accenture's proprietary digital innovation database. It captures public innovation announcements from the top 30 insurers in all major markets. It is important to note that these are English-language sources that are largely communicated throughout the market and viewed by analysts and investors.
An insurance company will only be known for what it communicates. If there is any question about whether messages matter – do so. In order to have a real impact, it is important what you say to the market about your innovations. This is especially true during a recession when investors are more selective and focused on competitive advantages.
In addition to the innovation theater
Insurers must think about the areas in the business where they can make a legitimate impact on the result. And they have to talk about their innovations in a way that passes clichés and buzzing words.
The usual conversation about where to spend time and dollars does not communicate innovation value. Instead, focus on how innovation will attract and retain customers, and create a messaging strategy that shows investors that your business is a safe place to invest.
The media is (still) the message
Public announcements about innovations can be a powerful way for an insurance company to attract the attention of analysts and investors, but it is not the only way. Some get what they need through an advertising strategy.
Progressives, for example, do not usually make public announcements about their innovations, but they do not have to. Their well-publicized price comparison model was a powerful value proposition for consumers. Brand value and an advertising budget that has more than doubled since 2016 speak volumes to analysts and investors.
Announcements are a Survival Skill
While advertising budgets measured in billions would be cost prohibitive for most insurance companies, communicating business value in the market is no longer voluntary. Making customer-oriented innovation investments and communicating them to the market is important to help attract and retain capital – and this is a critical time to think about it.
The harsh reality is that insurers need large capital reserves in order to be well valued and guarantee the new risks that their customers now face. Talking about what you do and the value you give the customer will enable you to continue to do so and help secure the future of your business.
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Disclaimer: This document is for general information purposes only and does not take into account the reader's specific circumstances and may not reflect recent developments. Accenture disclaims, to the extent permitted by applicable law, all responsibility for the accuracy and completeness of the information in this presentation and for any acts or omissions made based on such information. Accenture does not provide legal, regulatory, auditing or tax advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed personnel.