the digital insurance era - stretch your boundaries (accenture technology vision for insurance 2015)

Technology Vision for Insurance 2015 study

DemographicsCompany HQ n=221

Australia 13

Brazil 10

China 36

France 29

Germany 19

India 9

South Africa 11

United Kingdom 40

United States 54

Title n=221

CIO/Chief Mobility Officer 59

CTO/Director of Technology 30

Director, IT 67

CMO 8

CFO 11

COO 19

CSO 1

Other C-suite title 0

Function Head (Non IT-related) 18

Line of Business Head (Non IT-related) 8

Revenue n=221

$50 billion or more 31

$20-$49.9 billion 30

$10-$19.9 billion 44

$6-$9.9 billion 38

$1-$5.9 billion 45

$500-$999 million 33

• Authored by Accenture Technology Labs, Accenture Research and many business & technology specialists

• Aim: to identify emerging IT & business trends that will have the greatest impact on insurers

• This year included a primary research survey: 221 insurance executives in 9 countries

3Copyright © 2015 Accenture All rights reserved.

This year’s report builds on our theme from the last two years that Every Insurer is a Digital Insurer

Key findings:Stretching your boundaries beyond insurance• The “We Economy” will profoundly change insurance

• Advances in technology are causing carriers to redefine their roles

• Traditional business models are under threat

• Digital is stretching the business beyond the enterprise, and beyond insurance

• Digital Transformers are taking a 2-step approach:– Improving efficiency & quality of specific processes & products– Investing in their future through the transformative potential of digital

across the value chain

• Leaders are collaborating with other organizations in value-adding ecosystems

• They are becoming the enablers of new, disruptive technologies

• Digital offers an unprecedented opportunity for growth, reinvention & a broader social purpose 4Copyright © 2015 Accenture All rights reserved.

of insurers believe that, in the future,

industry boundaries will

dramatically blur as platforms

reshape industries into

interconnected ecosystems

75%

Color Palette


R 153G 51B 153

R 47G 83B 156

R 255G 221B 0

R 255G 153B 0

R 136G 221B 0

R 170G 17B51

Internet of Me

Outcome Economy

Platform (R)evolution

Intelligent Enterprise

WorkforceReimagined

1 2 3 4 5

5 Trends

1

The Internet of Me:Our world, personalized.

• Insurance customer experiences are going online

• Carriers are changing the way they build new apps, products & services

• They are creating personalized experiences that meet customer needs at higher levels than before

• In a connected world, insurance will be assessed, priced & sold very differently

• Shared data will be a powerful asset – if insurers can build consumer trust

• Insurers will have the option of becoming a more regular, proactive & positive part of people’s daily lives

The Internet of Me: Our world, personalized.

http://www.accenture.com/us-en/Pages/insight-technology-vision-insurance-2015.aspx

of insurers say providing

personalized customer

experiences is a top-three priority

73%

One in two insurers are seeing a positive ROI from their investment in personalization technologies

8

Q: What results are you seeing from your investments in personalization technologies?

Q15Copyright © 2015 Accenture All rights reserved. Confidential

Overall

Insurance

60%

50%

16%

16%

7%

14%

15%

17%

1%

2%

Positive return on investment Neutral resultsNegative return on investment Too early to measure resultsNot measuring results Not applicable – not investing in personalization technologies

Base = Total sample n=2,000; Insurance sample n=221

All Industries

Insurance

• Esurance’s “Sorta You Isn't You” campaign

• Positions the insurer as tailoring services for each customer

• Customizable auto insurance using telematics, big data & complex algorithms

• TV ad starred Lindsay Lohan as “Sorta Mom”

The Internet of Me: The trend in action


• Research & segment on customer needs; find personalization opportunities

• Learn about customers & their connected devices

• Evaluate threat of big-data competitors

• Decide what to offer customers in exchange for their data

• Review ecosystem strategy

• Update customer engagement processes & governance strategy

• Identify beneficial edge technologies

• Run pilots that rethink customer experiences & value propositions

• Prepare for customer-centricity

The Internet of Me: Developing your roadmap

YOUR 100-DAY PLAN YOUR ONE-YEAR PLAN

• Extend pilots & deploy new client experiences & value propositions

• Determine your competitive advantage in your customer’s Internet of Me

• Confirm & deploy ecosystem strategy

• Create organizational model for customer-centricity & value creation

• Explore new risk pools & related offerings

• Address data & device security issues

• Build customer trust for data sharing

• Use trust task force to go beyond compliance & build privacy into business development


2

Outcome Economy:Hardware producing hard results.

• Consumers don’t want products, they want outcomes

• Connected hardware & big data are enabling better outcomes

• Ecosystems are offering a broader range of better outcomes

• Insurers have unprecedented insight & control due to cloud-based software analytics, visualization technologies, hardware sensors & enhanced computing capabilities

• Internet of Things is pushing networks closer to customers, allowing insurers to offer personalized risk management & value-added services

• Carriers that harness these innovations will outrun their competitors

Outcome Economy: Hardware producing hard results.

Insurers who agree or strongly agree that organizations will increasingly shift from selling

products or services to selling

outcomes

83%


Mobile phones

Tablets

Wearables

Connected TVs

Connected cars

Kiosks/interactive displays

Smart objects

60%

60%

46%

47%

30%

29%

30%

31%

31%

36%

32%

35%

35%

38%

24%

25%

35%

36%

34%

34%

33%

33%

29%

24%

32%

32%

31%

29%

11%

10%

14%

12%

21%

22%

20%

17%

20%

21%

20%

20%

20%

16%

4%

5%

4%

5%

8%

6%

10%

12%

10%

9%

8%

5%

7%

9%

0.0135

0.015

0.01

0.071

0.1

0.0705

0.0705

0.097

0.097

0.0715

0.08

0.068

0.09Very High Impact High Impact Moderate Impact Low Impact No Impact

Emerging channels are expected to have a high impact on most insurance organizations

13

Q: What impact do you believe these emerging channels will have on your organization?

Q7Copyright © 2015 Accenture All rights reserved. Confidential Base = Total sample n=2,000; Insurance sample n=221

Insurance

Mobile phones

Tablets

Smart objects

All Industries

Insurance

All Industries

Insurance

All Industries

Insurance

All Industries

Insurance

All Industries

Insurance

All Industries

Insurance

All Industries

Wearables

Connected TVs

Kiosks / interactive displays

Connected cars

• Tokio Marine & Nichido Fire Insurance’s ‘How My Body Feels’ aims to prevent claims rather than simply pay out at the time of loss

• Outcome customers want: less cancer

• Uses mobile technology to monitor customers’ health

• Data analysis generates suggestions for healthier living

• Benefits for the customer, the insurer & society as a whole

Outcome Economy: The trend in action


Outcome Economy: Developing your roadmap

• Map current offerings with outcomes your customers want

• Take inventory of hardware at the edge of your network

• Evaluate product & service feedback loops

• Identify IoT consortia to meet your ecosystem’s hardware ambitions

• Define threats by startups using intelligent technology at the edge

• Explore converting products into value-adding advisory services

• Identify 3 new business models to pilot


• Pilot a sensor-based hardware project to measure insights gained from closer relationships with customer outcomes

• Model impact of shifting to outcome-based revenue

• Pilot the shift of 1 offering to outcome-based

• Evaluate ability to deliver hardware solutions at the edge; partner to fill gaps

• Appoint innovation champion to refine products to deliver required outcomes

• Source required data from outside

• Create roadmap for integrating hardware & feedback loops

• Develop ecosystem strategy

• Embed offering in ecosystem


3


Platform (R)evolution:Defining ecosystems, redefiningindustries.

• Digital industry platforms & ecosystems are fueling innovation & disruption, and capturing growth & profit opportunities

• Non-tech companies are joining internet-born pioneers with major platform-based initiatives

• Platforms build on cross-industry ecosystems to deliver innovative products & services

• Participation in these ecosystems poses fundamental questions for insurers

• Tools, techniques & data sources are all coming together

• Insurers that define their platforms & ecosystems ahead of the pack will gain a decisive competitive advantage

Platform (R)evolution: Defining ecosystems, redefining industries.

Insurers who agree that companies

will move toward real-time platforms

& systems as enterprises adopt

mobility & IoT solutions

77%


Most insurers plan to engage with digital partners within the industry

18Q23Copyright © 2015 Accenture All rights reserved. Confidential Base = Total sample n=2,000; Insurance sample n=221

Series1 61%

48%

40%

40%

33%

17%

64%

51%

45%

49%

39%

19%

InsuranceOverall

Q: What partners do you plan to engage with for digital initiatives in the next two years ?

Multiple mentions

New digital partners within my industry

Major digital technology and cloud platform leaders

New digital partners outside my industry

Traditional business partners

Developer communities (eg. open APIs with iOS or Android developer communities)

Startups and digital-business newcomers

• General Motors’ OnStar has grown from a safety and concierge service to a connected-car platform

• Real-time diagnostics, safety/emergency, infotainment, navigation, insurance modules, third-party apps, mobile connectivity

• Will offer to tell customers how well they drive, capture other driving data

• Option to share data with Progressive Insurance in exchange for discounted premiums

Platform (R)evolution: The trend in action


Platform (R)evolution: Developing your roadmap

• Conceptualize your business as a platform

• Appoint a cross-enterprise platform strategy champion

• Catalog existing partners’ platforms

• Set up governance of partners’ digital inputs & outputs

• Start to design your platform: business model, technology, governance

• Appoint team to develop API strategy & management approach

• Identify partners & ecosystem scenarios: join, partner or create your own?

• Identify potential technology partners


• Start shifting from pilot to production phases

• Launch platform & API programs

• Formalize technology partner & cloud services relationships

• Extend internal platform & API developer programs into external developer program

• Measure & report progress

• Evangelize apps & digital partner solutions built on pilot platform

• Expand partner strategies & move up the value chain


4

21

Intelligent Enterprise:Huge data, smarter systems—better business.Copyright © 2015 Accenture All rights reserved.

Intelligent Enterprise: The trend in action

Insurers who say managing data is

“extremely” or “very” challenging,

considering changes in its

volume, variety and velocity.

56%• Improved software intelligence is helping machines make better

decisions

• Insurers have more data than they can keep up with – machines can capitalize fully on the scale of big data

• Insurers should use software intelligence to drive operational excellence & innovation throughout the enterprise

• Machines today have the scale, speed & intelligence to make vital business decisions

• They can decide, self-evolve and discover

• Automation of manual processes is just the beginning – the intelligent enterprise will answer questions that once were unanswerable


Software intelligence is expected to revolutionize the way insurers use data

23

Q: To what extent do you agree with these statements?


Overall

Insurance

Overall

Insurance

. Overall

Insurance

Overall

Insurance

Overall

Insurance

55%

54%

46%

42%

41%

37%

39%

31%

42%

39%

36%

32%

39%

41%

41%

43%

39%

43%

38%

33%

7%

10%

11%

11%

15%

13%

14%

16%

14%

21%

1%

4%

2%

6%

3%

6%

6%

8%

4%

5%

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree


With data and digital complexity on the rise, software intelligence will be critical to simplifying IT.

Software is entering a new era of intelligence that will revolutionize the way we use data.

Emerging software solutions are enabling organizations to solve problems that were previously impossible to solve.

Software will soon be able to learn and adapt to our changing world and make decisions based on learned experiences.

This is the era of software intelligence, in which applications and tools take on more human-like intelligence.

All Industries

Insurance

All Industries

Insurance

All Industries

Insurance

All Industries

Insurance

All Industries

Insurance

• Climate Corp. offers farmers crop insurance & advisory services for optimal decisions

• Uses precision-agriculture sensors & systems, data analytics software

• Machine learning digs through >50 terabytes of data on weather, soil & other sources to predict crop performance

• Recommends most profitable crops to plant, seed to buy, when to plant, how to tend crops, when to harvest, yields to expect, etc.

• Field-specific weather-related crop insurance guarantees financial outcomes

Intelligent Enterprise: The trend in action


Intelligent Enterprise: Developing your roadmap

• Gain an understanding of software intelligence

• Catalog data sources & what you want to do with them

• Do gap analysis of your software intelligence capabilities & aims

• Identify opportunities to use automation & machine learning on routine processes

• Identify manual-intensive applications

• Prioritize opportunities

• Cultivate your data science talent


• Review top candidates for software intelligence

• Implement automation technology on one of these candidates

• Quantify the business impact

• Pilot a machine-learning solution that discovers new data associations

• Review machine-learning use cases

• Train data scientists in deep-learning & cognitive-computing technologies

• Secure strategic commitment to software intelligence & data science


5


Collaboration at the intersectionof humans and machines.

Workforce Reimagined:

• Natural interfaces, wearables & smart machines present new opportunities for insurers to empower workers through technology

• Machines are better at routine processes; people at strategy, context, communication & creativity

• Need to train employees to collaborate effectively with technology

• Also teach & guide technology like an apprentice – machines can interact with & learn from people, improving over time

• Collaboration can dramatically improve the outputs of both

• Reimagined workforce poses many management challenges, but the benefits will be huge

Workforce Reimagined:Collaboration at the intersection of humans and machines.

Insurers who believe successful

businesses will soon manage

employees alongside intelligent machines, ensuring

collaboration between the two

76%


Most insurers are considering technologies to augment the workforce

28

Q: Which emerging technologies are you considering adopting to augment your workforce?


Technologies that enable business users to complete tasks that previously required IT experts

Software automation (and/or cognitive computing) to augment the human workforce

Crowdsourcing talent and skills from outside your organization

Sensors to increase intelligence gathering about the surroundings

Robotics to automate business and industrial processes

Drones to replace surveillance or delivery services

None of the above

57%

51%

42%

40%

32%

13%

3%

56%

53%

47%

44%

30%

14%

3%

InsuranceOverall


Multiple mentions

• USAA the first insurer to seek the FAA permission to test drones

• Aims to examine damage & evaluate claims before sending in assessors

• Drone visuals could be combined with reports from employees on the ground

• Faster and more accurate claims assessment after a catastrophe

Workforce Reimagined:The trend in action


Workforce Reimagined:Developing your roadmap

• Appoint a team to explore integration of technology to support the workforce

• Examine what other firms are doing

• Set criteria to identify use cases

• Explore potential of people / machine interaction to address hard-to-fill vacancies

• Use gap analysis to understand where technology can help meet future skills needs

• Evaluate ability of technology to improve worker safety

• Test wearables to improve integration of workers & business processes


• Start to build a blended workforce

• Pilot prioritized solutions that play to the strengths of people & machines

• Determine opportunities to use technology to allow people to focus on complex tasks

• Train employees for new skills required in a blended workforce

• Integrate technology in specialist roles, enabling lower-skilled workers to fill them


Digital Insurance Era: Strategic RecommendationsGet back in touch with insurance’s roots

• Insurance helped make the horseless carriage a safe reality. Now, how can we enable autonomous cars?

• There’s no innovation without regulation. No industry can better govern the risk of disruptive technology than insurance

Decide which business models to invest in

• What is your role when service is personalized, measured by outcome & delivered through powerful ecosystems?

• Are you the back-office engine that provides underwriting capabilities to retail brands?

• Or can you lead an ecosystem that helps customers reduce risk & optimize outcomes? How do you move from a passive to an active role in customers’ lives?

Carve out spaces where innovation can flourish

• You can’t reinvent your business overnight: legacy systems, traditional revenue streams, culture & processes to consider

• Create new spaces where innovative thinking can flourish—dedicated innovation teams, investment in startups, partnerships with digital leaders

• Think of the business as an investment portfolio with mature businesses and new ventures under its management


Digital Insurance Era: Closing Thoughts

• Today’s digital technologies are about creating a fabric that connects customers, partners, employees & industries

• This enables new insurance value propositions that expand value creation & growth

• It shapes the next generation of products, services & business models

• It’s also about embracing a wider social & economic purpose—e.g. enabling self-driving vehicles & helping health insurance customers live longer, healthier lives


the digital insurance era - stretch your boundaries (accenture technology vision for insurance 2015)

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