US$375bn awaits insurance innovators, says Accenture

February 21 2018 by InsuranceAsia News Staff

Insurers that transform their businesses and operating models through digital innovation stand to capture US$375bn in new revenue in the next five years, according to a new report from Accenture.

The largest of these revenue growth opportunities will be in Asia Pacific.

The report estimates that the industry could generate an additional US$177 billion in revenue from five key areas: emerging risks, improved penetration of markets, value-added services, expanded business partnerships 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 that 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.

“Breaking away from the pack and capturing new revenue opportunities requires a shift in business mindset — a shift from product-focused to customer-focused; from rigid operating models to more fluid and agile operating models that respond quickly to customer preferences; and from going to market alone to partnering with insurtechs and technology behemoths that can help them reach new customer segments and reinforce their brand,” he added.

Accenture said that in the new digital environment, insurers can leverage new channels such as online and mobile, and use new technologies such as analytics and geo-location to enhance insurers’ effectiveness.

Among the new models that insurers can tap are direct-to-consumer, micro-insurance, middle-market life insurance, worksite insurance and robo-advisory advice.

“Maintaining the business status quo is unsustainable,” Costonis said.

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