Insurers intrigued by business ‘ecosystems,’ but stay on sidelines for now
Insurers recognize the growing potential of business ecosystems, but aren’t jumping at the opportunity to create them, according to new research from Accenture.
The professional services company defines “ecosystem” as a “network of cross-industry players who work together to define, build and execute market-creating customer and consumer solutions.”
Survey results show that insurers know the importance of competing with ecosystem businesses, but they are not eager to move forward due to falling short in numerous areas such as having the right capabilities, culture and technologies to fully exploit ecosystem opportunities.
Statistics show only 5% of insurance companies are currently in the position to strategically disrupt their industry. Those companies are labeled as “ecosystem masters.” The insurance industry had the second-fewest companies in this category out of 12 segments surveyed by Accenture.
Michael Lyman, a senior managing director and leader of Accenture Strategy in North America and Insurance practice globally shared, “Insurers have to decide whether they want to be the disruptors or the disrupted. 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 ecosystem capabilities to determine any organizational gaps that will prevent them from being effective ecosystem partners.”
According to the report, change can be seen if insurers “carefully assess their readiness and close cultural, technological and other gaps.” The report also suggest that insurers should “choosing the right, trusted partners that can help achieve economies of skill, scale and scope will be critical,” the report notes.
Accenture surveyed more than 1,200 business leaders, including 106 from the insurance industry, for its report. One thing holding carriers back is security: Only 26% of insurers say they know for sure that their ecosystem partners are actively working as the insurers themselves on resilience.
“While much work remains to be done to fill in the gaps between their intentions and executions, insurers recognize the challenge and see that the potential to alter the insurance value chain is significant,” says Daniele Presutti, leading Accenture’s Insurance practice in Europe. “Insurers should be fearless, take the offensive and embrace these platforms.”