Insurance wants open ecosystems but lack ability to deliver
Published: June 20, 2019
Updated: June 30, 2019
Author: Luke Jones
CATEGORY: Industry Trends
While insurance companies are welcoming the idea of creating inter-organization ecosystems to stimulate growth in an era of technological disruption, their ability to do so is limited. A new study by leading professional services firm Accenture, insurance companies are not positioned to succeed under an open insurance model.
In a recently published study, Accenture asked over 1,250 business leaders and found 84% of executives in the insurance industry say open ecosystems are a part of business strategy. In fact, 54% claim their organization is actively looking for partnerships outside their business. However, insurance companies are largely incapable of creating an environment for open business. Both technology and culture factors behind the delay.
“Insurers have to decide whether they want to be the disruptors or the disrupted,” said Michael Lyman, a senior managing director for Accenture Strategy in North America. “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.”
Almost all insurance executives (97%) told Accenture they think they would be an attractive organization for ecosystem partners. The company says insurance providers must develop a clear strategy where they seek to disrupt or innovate within the market to increase competitiveness.
“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.”