THINKPIECE
connected devices (such as a laptop computer,
smartphone, car, glasses, clothes, watch, and
home automation) per person will be around
7. It is predicted that digital will be more in-
tegrated into a life style where everybody will
be able to consume AnyTime, AnyWhere, on
Any Device, and receive Any Content.
Insurance Tech Vision, a piece of research
undertaken carried out by Accenture in 2016,
found that 84% of insurers agree that or-
ganisations are being increasingly pressed to
re-invent themselves and evolve their business
before they are disrupted. Apart from digital
transformation, the emergence of a desire for
“conscious living” is also becoming apparent.
The sharing culture across the Cloud, collab-
orative tools, and the desire to put in place a
circular and sustainable economy with more
solidarity are all part of what is now being
called conscious living or living services.
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Accenture’s Insurance Tech Vision 2017
report also revealed that 80% of insurers
agree that organisations that tap into what
motivates human behaviour, and design the
customer experience accordingly, will be the
next industry leaders.
Living Services is how a company responds
to its customer’s expectations, constantly
learning more about their needs, intents and
preferences, so that they can flex and adapt to
make themselves more relevant, engaging and
useful. Digital innovation is becoming suffi-
ciently mature and the integration of devices
to collect personal data becoming sufficiently
accepted for an insurance company to provide
’living services’ . The business model that can
handle such industry shifts and thrive is a
“Living Business” —one that evolves itself
quickly and often to adapt to its customers
fluid expectations.
LIVING SERVICES IN ACTION: A
PROFITABLE INSURANCE BUSINESS
FOR CUSTOMER SATISFACTION
New players are already leverag-
ing these digital opportunities and developing
breakthrough services and/or living services
to satisfy customer expectations, preferences
and gaining trust to create profitable business.
Lemonade and Hippo are two P&C personal
line tech-insurance companies that offer
intuitive home insurance with simple and
Issue 5 • March 2018 • The Insider
cost-effective claims processes based on a
smart, tech-driven approach (e.g. Artificial
Intelligence and Chatbot). Hippo, launched
in 2017, has a business model that optimises
personalised pricing, and supplies devices
(leak detectors, IOT to monitor homes
and ensure upkeep, etc.) offering a more
transparent coverage. Lemonade Insurance
is a peer-to-peer insurer based on digital
innovation and behavioural economics.
It also has a social aim (i.e. underwriting
profit will be the deposit to an NGO chosen
by the customer), which was created as a
competitive advantage to fight against fraud.
In 2017 Bloomberg valued the business at
$500 million.
Insurance Technology Start-up Market
Trends and Insights (Q3 2017) published by
Venture Capital shows that there are 1,316
Insurtech (P&C, Life, Commercial) and a
variety of top investors are making bets on
Insurtech, providing a total of $19 billion
in funding. This report also identified 140
Auto Insurance start-ups, with $6.8 billion
in funding, which offer car insurance based
on telematic products. It is possible that one
of them might be the “Lemonade” of car
insurance and will offer a real alternative for
people who cannot or do not want to pay a
high annual premium.
This Insurtech phenomenon is still in an
early market stage and the barriers of entry
into the insurance market are still high (i.e.
regulation, capital requirement, and repu-
tation). Lemonade reported that 87% of its
customers are first time insurance buyers in
2017 and so it is clearly targeting millenni-
als. At the same time, to cross the chasm and
reach a wider population will take several
years and an answer maybe to partnering
more with Insurance companies rather
than competing with them. As an example,
Allianz made a "strategic investment" in
Lemonade in 2017.
DEVELOPING THE RELATIONSHIPS
WITH INTERMEDIARIES AND ECO-
SYSTEMS TO ENGAGE DIFFERENTLY
WITH CUSTOMERS AND CREATE
NEW REVENUES WITH LIVING SERVICES
To provide living services, some insurers are
taking the opportunity to expand rela-
tionships with intermediaries and develop
Becoming an “Everyday
Insurer” with living
services appears to be
the win business model.
ecosystems as areas of revenue growth and to
provide customers with additional value. Ac-
centure estimated the value of such initiatives
is currently $80 billion worldwide.
The trend towards multi-partner relationships
in insurance is increasing; Insurance of the
Network and Network Insurance are just two
examples of such multi partner relationships.
The value chain of insurance now involves
partnerships between networks of suppliers/
vendors in order to diversify the insurance
offering, enhance the focus on customers, and
to ensure their “everyday” satisfaction as well
as to build loyalty by providing living services.
Insurers can embrace three complementary
business models to increase their relevance to
the customer:
THE ON-THE-GO INSURER
The carrier provides conve-
nient insurance products or
services— often usage-based or
pay-peruse— embedded in other prod-
ucts and services consumers use every day.
Computer-generated advice will play an
increasing role in the sale of such offerings.
These products and services will typically be
sold through digital platforms such as GAFA
or aggregators or plugged into other offerings
like IoT devices. Insurers that succeed with
on-the-go products will sell not a simple in-
surance product or service but a living service
that develops the customer relationship and
customer value over time.
BEYOND INSURANCE
Rather than operating through
someone else’s ecosystem, the
insurer will orchestrate its own ecosystem
that provides customers with an end-to-
end solution that spans complementary
services from multiple partners.The carrier
will attract customers at important moments
in their lives by offering them services
beyond insurance and then selling them
relevant cover—for example, home search
and mortgage origination, coupled with
homeowners’ insurance, concierge services,
and so forth.
THE ALL-IN-ONE INSURER
The insurer offers a complete
portfolio of risk mitigation and
protection services spanning all of
the customer’s protection needs, giving him
peace of mind. It anticipates the customer’s
changing needs as he moves through his
lifecycle with the constant support of the
carrier, which offers not only insurance
cover but also proactive risk prevention
and advice.
“The insurance industry plays a critical role
in the Irish financial services industry and
for the economy and its citizens” (Ed Sibley,
Deputy Governor Prudential Regulation,
Nov. 2017 to the Insurance Ireland, Annual
President’s Conference). We focus on key
challenges that the global Insurance industry
is currently facing. These challenges offer
exceptional new business opportunities for
those in the Insurance industry who can
develop and successfully implement the
appropriate business strategies in a fluid
ecosystem. Becoming an “Everyday Insurer”
with living services appears to be the win
business model.
Issue 5 • March 2018 • The Insider
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