Roberto, considering the global pandemic situation that has been very difficult for people and industries alike, how do you see the future of the insurance industry generally? What are the challenges?
Despite a year of recessionary conditions and upended risk models, our analyses show the global insurance market is heading toward significant growth over the next 5 years. Amid that growth, we see new and shifting revenue pools. Insurers will need to innovate for competitive advantage in this new revenue landscape while building resilience into their businesses and products. For an insurer, the best ways to gain advantage and differentiate the products offering is to include high-quality services, provide end to end experience to clients, and avoid the commoditization approach. Also, insurers should provide advisory services to clients during difficult times, such as the pandemic we are now facing.
What are those new revenue pools you see in the insurance business?
We see new opportunities in four areas. First is in health, wellness, and life products and services. Then in technology integration within traditional products, and a shift to alternative distribution – like big tech, manufacturers and insurtechs – and direct sales of small commercial insurance. The last area involves products and services addressing new exposures, such as climate change and cyber threats.
Can you be more specific?
For example, the area of health, wellness, and life products is constantly shifting, but right now two segments stand out as potential opportunities for insurers. By 2050, one in four persons living in Europe and Northern America could be aged 65 or over. With improvements in science, medicine, and health habits, this generation is living longer, too. Innovative new products and services as part of a partner ecosystem could help insurers better serve seniors, grow revenues, and delay the need for life, disability, and longer-term care claims. The second segment concerns the generation known as Millennials. They are also interesting because they are increasingly willing to share personal data when they get something in return.
How can consumers benefit from sharing their data with insurers?
Rewards for data sharing could come in the form of reduced premiums or in the form of real-time health and wellness guidance based on user attributes or behavior data. Policyholders who can receive timely medical interventions through early symptoms identification are a good example. Also, digital health coaches can offer real-time advice based on biomarker monitoring for healthier habits. With such willingness of the younger generation to share personal information, insurers can narrow risk pools more accurately and tailor the personalized offers that consumers are demanding.
It seems to me technology is playing a major role in this…
You are right. From auto to home to health, technology is changing not only the way insurers do business but also the very products and services they offer. This is the case with the integration of technology into existing products. Internet of Things (IoT) sensors
are creating new ways to track, price, and promote health, home safety, and security. At the same time, I want to emphasize that technology and digital experience should be properly combined with a human touch, because that will remain essential to client service. Also, technology allows for increased personalization of products, services, and rates, but insurers need to be prepared to operate on the right platforms and with the right partners to enable that personalization.
How important is the role of partnership? Isn’t technology adoption something that organizations can do alone?
From our experience, the multifunctional challenges that companies face require them to select partners that can bring the proper set of skills, so that the two sides of the partnership complement one another, as well as partners having geographic reach that can enable connections with the different markets where the companies operate. I can give you a concrete example that involves cloud adoption: according to one of our researches, nearly two-thirds of companies aren’t achieving the expected benefits of cloud migration. When we examined what may be holding businesses back in driving their cloud agendas and achieving their goals, “lack of skills” was most frequently included in the top three barriers as perceived by CEOs.
Where do you see the role of Accenture consultants in helping companies unlock the value and overcome those perceived barriers?
We can harness our unique expertise at the intersection of business and technology – to help tailor a strategy that fits and to uncover the right technology for a client’s toughest business problems. Our advantage is that we understand our clients’ businesses in the context of their industries, and, because our teams are connected through our industry networks, we can bring insights and experience from other industries.
Coming back to partnership, we have heard about a recent project where Accenture partnered with Generali. What is that about?
Together, we’ve created a joint venture called Group Operations Service Platform (GOSP) that will leverage cloud technologies and shared technology platforms to accelerate innovation and digitization. The new solutions will support Generali Group in improving operational efficiencies and profitability, achieve cost savings, and enhance service quality to meet the digital expectations of customers, agents, and employees.
What can we expect in the next year from a business perspective?
As we discussed, technology is going to play an important role. Sustainability, too. Our research confirms that leading companies that scaled technology innovation during COVID-19 are growing revenue five times faster than are lagging adopters. And companies that combine sustainability with technology are two and a half times more likely to be leaders in the future. But as I mentioned in the cloud example, it is not just about technology itself, but rather about how you use it. Last, but not least, we expect to see selected mergers and acquisitions as a possible lever for growth where there is complementarity and the possibility to reach a market-relevant size.