Written by: Shay Alon, Managing Director – Insurance, Global Lead Accenture Life and Annuity Software
Accenture predicts significant global growth in the insurance industry over the next five years. However, revenue pools will shift, and life insurers will need to innovate to gain a competitive advantage from not only product innovation, but also innovation in distribution channels. How much opportunity is at stake? According to Accenture’s report, almost five percent of global premiums—approximately $280 billion—are anticipated to be impacted by innovations in products ($140 billion) and shifts to digital third-party platforms ($140 billion). Given these seismic shifts, we see the following opportunities for you to grow your business:
1. Combined digital insurance and wellness platforms enhance customer experience and build trust
Data-driven digital insurance platforms can unlock insights that help you shape the experience that each consumer expects. When infused with data-driven technology, products can present themselves to potential policyholders at just the right moment — a far more effective approach than pushing them out to consumers at random times. Health and wellness apps present a huge opportunity for you to connect with current and potential policyholders when it matters most. This provides a better and less obtrusive experience that also increases the likelihood of winning new policyholders.
2. AI-optimized distribution channels
Whether you’re looking for qualified agents or looking to keep and incentivize the ones you have, distribution management can improve the top and bottom lines for both you and your agents. AI and machine learning are driving major advancements in persistency and distribution efficiency. Combined, these technologies can make your operations run more efficiently by optimizing product placement and reducing distribution costs. This, in turn, can allow you to offer attractive products along with flexible pricing and compensation, helping you to attract the best agents.
3. Relevant new products and services integrated with technology
Artificial intelligence allows life insurers to offer highly personalized coverage linked to the specific circumstances of each policyholder, such as their stage of life. Considering AI’s ability to generate such tightly tailored policies, it’s no surprise insurers of all sizes are investing heavily in it. According to Global Data research, insurance companies will spend $3.4 billion on AI platforms worldwide by 2024. AI, combined with data analytics, can help you generate insights to improve your product development and speed your new products to market. That’s welcome news if you’re planning to use customizable coverage to capture microsegment opportunities.
The good news is you can quickly build or update your digital capabilities through ecosystem partnerships, which have become more accessible through APIs and integrations to digital insurance platforms. As these platforms become more intelligent and automated, you will be able to quickly uncover more opportunities to create innovative new products and services that can profitably grow your business.