A 'Market Of One'

Now Entering The Post-Digital Era...

How insurers are ‘weaving real-time risk protection’ into the client’s everyday life

The following are excerpts from a groundbreaking report from Accenture that considers the path going forward for insurance and financial services, as its engagement with the digital age matures.  The full report can be accessed here.

Insurance organizations are taking bold steps into a new age—one that tailors itself to fit every moment. It’s an era when insurance products and services evolve and adapt according to customer behaviors and context—from hyperpersonalized marketing to telematics-driven auto insurance that rewards safe driving, to parametric travel policies that instantly pay compensation when a flight is delayed for more than two hours.

Leading insurers around the world are weaving real-time risk protection and mitigation services into the customer’s everyday life. North American life insurance company, John Hancock, offers life policies that track customers’ fitness and health data through wearable devices. Policyholders earn rewards and premium discounts for hitting exercise targets, and use the carrier’s app to earn gift cards for logging workouts and healthy food purchases.

The Vitality Vision

The results are impressive: the average customer with a traditional insurance plan engages with their life insurance company once or twice per year. Policyholders on the Vitality program engage with John Hancock nearly 600 times per year. John Hancock claims Vitality customers generate 30 percent lower hospitalization costs than the rest of the insured population.

The intense engagement builds customer loyalty and satisfaction. The wealth of data that Vitality provides also allows the insurer to assess risks and price insurance with more precision than carriers using coarser aggregate data, therefore potentially becoming more competitive and profitable. John Hancock has now integrated Vitality into all of its life insurance policies.

Farmers Insurance, also in the US, is reimagining renters’ insurance for millennials through its new brand, Toggle. Toggle offers customizable insurance subscriptions that give customers the freedom to toggle different elements of coverage up, down, on or off at any time. It’s a significant step beyond the one-size-fits-all policies of the past.

ArgoGlobal Assicurazioni, meanwhile, is working with gig work platform Jobby, and insurtech startup Axieme, to offer on-demand, pay-as-you-go insurance for temporary and short-term workers in Italy. Users can get liability, illness and injury cover —underwritten by ArgoGlobal—for the duration of a gig and extend it with a click if they need to.

And in auto insurance, Nationwide in the US has launched SmartMiles for those who work from home, carpool frequently or use public transit more than they drive. The product allows Nationwide members to pay only for the miles they drive and how safely they drive. SmartMiles uses a small device to track the miles driven by that vehicle.

Insurance companies like these are figuring out how they can shape the world around people and pick the right moments to offer their products and services. Looking at these companies individually, there is an emerging story of hyper-personalization and on-demand digital services. But the collective enterprise efforts reveal a shift in how people will  experience the world for generations to come. Soon, each individual will seek their own digital experiences, and every moment will represent an opportunity for insurance companies to play a role in shaping it.

Building On Digital Foundations

What is enabling—and driving—this reality-shaping shift?
The emergence of a post-digital world. In the “postdigital” era, companies are moving beyond the foundational adoption of digital tools and concepts to a new generation of technologies and innovations that businesses will be able to apply to differentiate themselves in the marketplace.

North American life insurance company, John Hancock, offers life policies that track customers’ fitness and health data through wearable devices. Policyholders earn rewards and premium discounts for hitting exercise targets, and use the carrier’s app to earn gift cards for logging workouts and healthy food purchases...

Digital-born companies such as Google, Amazon, Facebook and Apple have showered consumers with digital products and services. However, we’re nearing a point in digital enterprise where more incumbent businesses will have completed their digital transformations than have not. The post-digital era doesn’t mean that digital is over just the opposite, because most of the digital journey still lies ahead. In a world in which every insurance company is driving its business with digital technology, it will be about which digital technologies are deployed—and how.

The digital saturation of our world has granted companies exceptional capabilities. They can understand their customers with a new level of granularity. They have more channels than ever to reach those consumers. With every company finally converging on the same digital footing—though more slowly in insurance than some other sectors—there are more digital ecosystems and more potential partners to help insurance companies create holistic experiences.

But as we move collectively into the post-digital era, these capabilities and advantages are now available to every organization. Digital-era technology, which began as a differentiating advantage several years ago, is now expected from every business, including insurers. Digital itself is no longer differentiating, but its impact is still changing.

Getting To The ‘New Moment’

Post-digital companies are out to bypass the competition by changing the way the market itself works. From one market to many custom markets— on-demand, in the moment. Industry lines are no longer a boundary to growth, and the disruption that came in waves as technology matured in the digital era is now ever-present. Any company can compete with any other or carve out a new market. Take Amazon partnering with Berkshire Hathaway, an insurance and holding company, and with JPMorgan Chase, a global financial services firm, to tackle challenges in healthcare spending—three companies in different industries pooling resources to prepare for foundational disruption.

‘Keeping up with the digitals’ and the insurtechs won’t cut it for what’s coming next. Insurance leaders looking to do more than just digitize their core businesses must set new goals in their sights, including:

  • Move your focus to the end. As insurance companies begin to understand instant demand and supply options, they will have more opportunities than they can pursue. Success will mean carefully choosing the specific opportunities companies want to target—and just as important, the ones not to target—then working backward to determine how they will get there.
  • Define what it means for your business to be post-digital as the world moves into a new phase of cooperation. As insurance companies settle on their new goals and the pathways they will take to reach them, they must also determine which ecosystem partners they need and where their own place in the ecosystem should be
  • Evolve from SMAC to the next set of disruptive technologies. When sets of powerful emerging technologies converge over a short period of time, they can spark a step change, letting businesses reimagine entire industries. We saw
    this most recently with social, mobile, analytics and cloud (SMAC) technologies, the foundational technologies of the digital era. Mastering SMAC will position insurance companies to harness the combinatorial power of disruptive technologies that will define the post-digital era—Distributed ledger technology, Artificial intelligence (AI), extended Reality, and Quantum computing (DARQ). Failure to hone their expertise in SMAC will leave businesses unable to meet even the most basic demands of a post-digital world.


Read the full Accenture Technology Vision report here.