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Accenture’s Vision of Insurance: 5 Trends and a Great Plot

I have the opportunity of  reading a lot of interesting, forward-looking material related to insurance technology.  While most have some value points, few have the detail and holistic view that I found in the Accenture Technology Vision for Insurance 2015.

It is well presented and has specific conclusions that will challenge many of us, for all the right reasons.  We’d like your thoughts.

The future is non-fiction

The report identifies five specific trends:

  • The Internet of Me: Our world, personalized.
  • Outcome Economy: Hardware, producing hard results.
  • The Platform (R)evolution: Defining ecosystems, redefining industries.
  • Intelligent Enterprise: Huge data, smarter systems, better business.
  • Workforce Reimagined: Collaboration at the intersection of humans and machines.

Each section provides background, support, and examples.  However, I found myself reading it like a short story, where each of the trends (protagonists) build towards a dramatic conclusion, revealing a new world of opportunity.

Here’s my Cole’s notes version…

The internet is becoming personal.  Leading insurers are realizing that products,  services, and distribution channels need to be customized to the individual.  The only workable approach is to obtain permission from the consumer to use data and analytic tools to provide a bespoke experience, based on need and  context.

Once the insurer enters this new world, it finds that consumers are seeking alternatives which will have impact on the insurance product.  For urban consumers who abandon a personally owned vehicle in favour of car sharing, a personal, vehicle-centric insurance program is of little interest.  The need is risk-managed travel.

This could extend further in the Internet of Things (IoT), where smart homes become more self protecting, and the physical risks decline.  However, these developments offer more opportunities for bundling offerings to warrant availability and continuity of services.

Responding to consumers interests and demands will require skills and technologies that are outside the insurers’ core skills.  Networks of suppliers (ecosystems) will start to emerge to share data and technologies, focusing on the needs of  industry and consumer segments.  Insurers will have the option of acting in a lead servicing role, or behind the scenes, providing capital and expertise from the risk management and financing perspective.

Seamless integration – at the macro level and for each of the individual enterprises – will be challenging.  This is complex stuff.  Machines will become part of the answer as they learn to work smarter, tutored by  human employees.

The machines will become superior ’employees’ in dealing with highly complex tasks (creating customized wordings) and effectively utilizing big data.  This will cause a displacement of employees in traditional job functions, but will offer new opportunities for careers in creative thinking and strategic planning.

There will also be need for ‘teachers’ who will have machines for students.

The end of this story is a cliff-hanger …

The authors see the evolution period from now to then is three to five years.  Insurers are encouraged to act now, and the report provides suggested short and mid-term action plans.

However, the major challenge is a core recognition:

“What’s new about these moves is that they are not directed internally—toward improvements in current operations and business processes. Instead, progressive insurers are stretching their boundaries to leverage a broader ecosystem of digital businesses as they shape the next generation of their products, services, and business models. And they are doing so with an eye on their wider social and economic purpose.”

Insurers making the transition have unique opportunities.  Those not, …..

Methodology and Format

The report is not speculation.  It is the product of a global survey of IT and business experts, one-hundred interviews with key technology and business leaders, input from an external advisory board, and internal analysis.

The authors note that each of the trends – including machine learning – are already being operationalized by insurers.

What do you think?

A number of these trends have been identified in other work, and consultants and analysts have insisted that inaction is not an option.  The rigor of Accenture’s approach adds further credibility as well as a highly plausible road map.

As to the conclusions?  I would like your thoughts.  Are we moving inexorably towards the brave world the Accenture authors envision? And if not, ….