Today, embracing ecosystems is of vital importance to become more agile and future-proof, but maybe most importantly, to be able to address customers in the moment of need, which will improve customer relationships. This way, insurers can get ahead of competitors.
Over the last couple of years, the insurance industry has seen a change on all fronts; accelerated digitalization, higher consumer expectations and updated laws and regulations, to mention a few. The growing dependence on digital technologies is reshaping borders across industries and as traditional insurance industry boundaries fade out, the future of insurance is most likely to be highly influenced by ecosystems.
Ecosystems help insurance companies transform, modernize, and stay on pace with current trends. With the right ecosystem partners, insurers can take action to get ahead, boost efficiency and see a positive return on investments.
What is an ecosystem?
An ecosystem is a network of players, either from the same or from a different industry, who work together to offer complementary products and services. No single player must produce all components of the solution. Instead, each party delivers an important element or capability to the customer solution. These co-acting partnerships allow companies to cut down costs through shared resources and cross-promotion and give consumers access to multiple solutions in one place. That is the power of ecosystems.
Over the next decade, ecosystems will most likely become central for insurers. Therefore, it is important to find a mix between making, buying, and collaborating, as well as using own resources to create new offerings, using customer and data assets.
In today’s connected world, consumers manage most of their lives online. They expect that you know who they are, what they need and when they need it. They expect high standards of service levels and demand that you are easy to transact with. With more data available and continuous customer feedback, insurers will be able to expand their ecosystem landscape over time. Hence, they can focus on their customers and transform their business to utilize the potential in the opportunities that ecosystems create.
To succeed in the ecosystem landscape
For insurers to succeed in the ecosystem landscape, they need to define a clear strategy and decide which kinds of ecosystems to participate in and what their specific contribution can be. They also need to select use cases based on customer value. Furthermore, it is important to build a platform, which makes integration easy, and identify incentives for other partners to join. Whether insurers decide to build up a thorough service landscape, or focus on integrating their insurance offerings into existing customer journeys, they need to invest in technological and organizational capabilities.
One way or another, insurers must reconsider their business model. In the future, successful insurance companies will no longer work as isolated organizations, but rather as part of the right ecosystem, offering the right products. It is high time for insurers to initiate change now.