Ecosystems can be game-changers for P&C insurance. It has been proven that the adoption of a digital ecosystem mindset can bring significant advantages to insurance companies.
But what really is a digital insurance ecosystem?
An ecosystem generally means an interconnected system of offerings from a variety of participating providers, like a network of players who work together to define, build, and execute disruptive consumer solutions that enables them to fulfill multiple needs through an integrated user experience.
Ecosystems allow companies to reduce costs through shared resources and cross-promotion, while also benefiting consumers with convenient access to multiple solutions in one place and the player involved can get the advantage of disrupting the market by leveraging innovative experiences that are possible as a result of the partnership.
Though not early adopters of technology, insurers today are rapidly embracing ecosystem models as they have realized its significance and the immense benefits it brings about- from helping build partnerships and communities that appeal to customers to mutual support for business endeavors. And most importantly, it allows insurance companies to leverage a variety of technologies to improve internal operations and enhance the customer experience.
Top Benefits of Insurance Ecosystems
One of the consequential advantages of ecosystems is that it provides insurance companies an opportunity to leverage the benefits of partner organizations, and thus, increase internal efficiency, deliver transformative customer experiences, and gain a competitive advantage.
In a recent survey by Accenture, 84% of insurance executives consider ecosystems an important strategy, and 54% are actively seeking ecosystem capabilities.
The insurance ecosystem has the power to generate revenue, accelerate technology, and lower costs. At the same time, it increases opportunities for insurers to reach a wider audience and engage customers according to their needs and preferences.
- New revenue sources
- Rapid technology adoption
- Lower costs by improving business processes
- Better Insurer-Policyholder Relationship
- Connect with policyholders
- Sets apart from competitors
An ecosystem allows insurers to offer customers a more tailored, engaging experience, setting your organization apart from the competition.
Pressing Need for Insurance Ecosystems
It has been found that insurance industry is one among the top that will be most susceptible to future disruption. And hence, digitally stagnant companies will likely suffer significant market share erosion in a few years.
But digital ecosystems offer traditional insurance players an opportunity to expand offerings and deepen customer engagement across channels, geographical areas, and lines of business. By partnering with other organizations in this model, insurance companies can reach a broader group of potential customers, tap into new sources of data, and improve established processes. Each member of the ecosystem gains the advantages of the entire network, without straining any one company’s existing resources.
The pandemic has accelerated the ecosystem evolution especially since ecosystems make it easier for insurance companies to embrace change and change is rapidly becoming the only constant for insurers.
Even face-to-face meeting presents a new level of risk for the meeting’s participants. For insurance professionals seeking to build partnerships, or for customers who need a range of services for their new home or car, several meetings may be in order. Digital ecosystem platforms allow these connections to be made remotely, protecting participants’ health and safety while facilitating ever-stronger professional connections. An ecosystem offers a way to respond to all of these pressures in a customer-centric way.
Insurance carriers that don’t embrace new modes of digital distribution may suffer. A recent Accenture report predicts that insurance organizations that lag in their response to digital change “could suffer market share erosion worth a total of US$198 billion worldwide over the next five years,”. Many of these opportunities will migrate to digital ecosystems as the customers whose business underpins insurers’ growth seek coverage on new platforms.
And in enabling such critical digital transformation in a seamless and hassle-free manner for insurers, organizations like Axcel Beck plays a significant role. We help insurance players of all sizes, across the globe, to transition from traditional and legacy systems and thus empower them to compete better in today’s digital insurance environment.