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Open Insurance - Unlocking Ecosystem Opportunities For Tomorrow’s Insurance Industry

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Accenture Insurance
Accenture Insurance

For early adopters, open insurance offers new revenue streams, increased customer engagement and continued market relevance. Learn more: https://www.accenture.com/us-en/insights/insurance/open-insurance

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UNLOCKING ECOSYSTEM OPPORTUNITIES FOR TOMORROW’S INSURANCE INDUSTRY OPENINSURANCE
WHAT IS OPEN INSURANCE? GLOBAL INNOVATOR PRODUCT & SERVICE INNOVATION WORKFORCE TRANSFORMATION …the practice of insurers sharing and consuming data and services to create more appealing value propositions and new revenue streams. These data and services are exchanged with third parties within and beyond the insurance industry and are made externally accessible by means of APIs. Where relevant, customers authorize their service providers to make their data accessible, in return for which they expect better, more personalized services and experiences. 2Copyright 2018 Accenture. All rights reserved.
APIS AND ECOSYSTEMS Open insuranceAPIs are the glue that binds together insurers’ ecosystem propositions. They enable the exchange of data and connection of applications within the enterprise and with partners or third parties. Insurer Consume: Using external data and services for deeper insights and innovative propositions Share: Providing / exposing data and services. Potential to monetize proprietary assets and insights Collaborate: Integrating and openly innovating with ecosystem partners for holistic added-value services and propositions Source: Accenture Research 3Copyright 2018 Accenture. All rights reserved. Consume Share Collaborate
are actively seeking ecosystems and new business models will generate half of revenue or more from ecosystems in the next 5 years agree that ecosystems allow them to grow in ways that are not otherwise possible A KEY TO UNLOCKING ECOSYSTEM STRATEGIES Insurers are increasingly aware of the importance of ecosystems, but most are not yet embracing open insurance. Source: Accenture Strategy Ecosystem Survey 2018 4Copyright 2018 Accenture. All rights reserved.
TRANSFORMING INDUSTRIES APIs are already transforming business models in other industries— travel, telecoms, banking and more. of European banks plan to make major investments in open banking initiatives of the total banking revenue pool in Europe will be associated with activities enabled by open banking by 2020 5Copyright 2018 Accenture. All rights reserved.
INSURANCE USE CASES New forms of usage-based cover e.g. short-term car insurance, on-demand gadget cover, cargo insurance covering specific shipments. Rolling SME contracts, with: monthly premiums aligned to risk and reflecting business changes; dynamic limits and excesses; regular assessments to minimize over/under insurance. Harnessing open banking data for greater customer insights and personalized contact: • Identifying new coverage requirements (new family, new cover limits following purchase of high ticket items) • Detecting renewals and premiums with 3rd parties • Suitable levels of • excess based on affordability Seamless digital distribution partnerships with a wide range of companies e.g. PFMs, retailers, real estate, automotive, affinity organizations. Platforms aggregating customer insurance holdings and using a suite of insurance and banking APIs to identify: • Areas of over/under insurance • Appropriate excesses and limits • Cover better suited to customer needs • Better renewal quotes Open data speeding up and tailoring quotes e.g. land registry, satellite imagery, mobile phone number. Transferable driver behavior and usage data, combined with e.g. roads travelled, associated accident rates, typical weather conditions, for tailored pricing. Partner APIs to identify company specific, real-time cyber risks, improving cyber pricing, underwriting and risk mitigation. Opening access to proprietary risk and pricing models e.g. mortality risk scoring. Satellite / sensor technology providing real-time risk management alerts based on e.g. flood / rainfall. Policy service / administration requests seamlessly handled through 3rd party digital channels. Administration plug-in: Reducing market inefficiency and duplication of effort in commercial insurance (e.g. KYC/AML checks). Parametric travel policies that instantly pay compensation when a flight is delayed for more than two hours. Telematics or OEM data providing FNOL and instant accident reconstruction data. Automatic image-based loss assessment and claims payments with shared APIs across ecosystem. Monetizing proprietary databases (e.g. car parts) and labor costs (e.g. healthcare treatment costs). CUSTOMER ACQUISITION AND DISTRIBUTION PROPOSITION DEVELOPMENT UNDERWRITING POLICY ADMINISTRATION AND SERVICING CLAIMS 6Copyright 2018 Accenture. All rights reserved.
OPEN INSURANCE: THE STATE OF PLAY Without the regulatory impetus driving banking to open up, insurance carriers are taking only tentative steps into open insurance. Source: Accenture Research Insurance API Watch Tower, Programmable web. Note: Cumulative number of APIs 7Copyright 2018 Accenture. All rights reserved. Insurance APIs are dwarfed by those in other FS sectors, but growth is picking up.
Legacy systems are ill- equipped to handle multiple partnerships and ecosystems, let alone personalized interactions and flexible propositions. The insurance industry lags other sectors in Accenture’s Ecosystem Capability Index, especially in the areas of talent, culture, strategy and innovation. WHAT’S HOLDING OPENINSURANCE BACK? The realities of implementation and concerns around the implications of open architecture are hampering its development: Insurers and consumers are uneasy about sharing data. 1. 2. 3. 8Copyright 2018 Accenture. All rights reserved.
HOW TO CAPTURE OPEN INSURANCE OPPORTUNITIES 3. 2. 1. TECHNOLOGY Build API-enabled, data-rich (open) architecture ORGANIZATION Assess and understand current capabilities and gaps to create agile and innovative organizations PARTNERSHIPS Develop new strategies, capabilities and models 9Copyright 2018 Accenture. All rights reserved.
THE PROMISE OF A DIFFERENT FUTURE FOR INSURERS AND CUSTOMERS Open insurance could transform insurance value propositions and business models. 1 But for early adopters of open insurance, the potential rewards are great. It ensures new revenue streams, increased customer engagement, and continued market relevance Adoption laggards risk putting themselves at a steep competitive disadvantage. 2 3 4 10Copyright 2018 Accenture. All rights reserved.
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Open Insurance - Unlocking Ecosystem Opportunities For Tomorrow’s Insurance Industry

  • 2. WHAT IS OPEN INSURANCE? GLOBAL INNOVATOR PRODUCT & SERVICE INNOVATION WORKFORCE TRANSFORMATION …the practice of insurers sharing and consuming data and services to create more appealing value propositions and new revenue streams. These data and services are exchanged with third parties within and beyond the insurance industry and are made externally accessible by means of APIs. Where relevant, customers authorize their service providers to make their data accessible, in return for which they expect better, more personalized services and experiences. 2Copyright 2018 Accenture. All rights reserved.
  • 3. APIS AND ECOSYSTEMS Open insuranceAPIs are the glue that binds together insurers’ ecosystem propositions. They enable the exchange of data and connection of applications within the enterprise and with partners or third parties. Insurer Consume: Using external data and services for deeper insights and innovative propositions Share: Providing / exposing data and services. Potential to monetize proprietary assets and insights Collaborate: Integrating and openly innovating with ecosystem partners for holistic added-value services and propositions Source: Accenture Research 3Copyright 2018 Accenture. All rights reserved. Consume Share Collaborate
  • 4. are actively seeking ecosystems and new business models will generate half of revenue or more from ecosystems in the next 5 years agree that ecosystems allow them to grow in ways that are not otherwise possible A KEY TO UNLOCKING ECOSYSTEM STRATEGIES Insurers are increasingly aware of the importance of ecosystems, but most are not yet embracing open insurance. Source: Accenture Strategy Ecosystem Survey 2018 4Copyright 2018 Accenture. All rights reserved.
  • 5. TRANSFORMING INDUSTRIES APIs are already transforming business models in other industries— travel, telecoms, banking and more. of European banks plan to make major investments in open banking initiatives of the total banking revenue pool in Europe will be associated with activities enabled by open banking by 2020 5Copyright 2018 Accenture. All rights reserved.
  • 6. INSURANCE USE CASES New forms of usage-based cover e.g. short-term car insurance, on-demand gadget cover, cargo insurance covering specific shipments. Rolling SME contracts, with: monthly premiums aligned to risk and reflecting business changes; dynamic limits and excesses; regular assessments to minimize over/under insurance. Harnessing open banking data for greater customer insights and personalized contact: • Identifying new coverage requirements (new family, new cover limits following purchase of high ticket items) • Detecting renewals and premiums with 3rd parties • Suitable levels of • excess based on affordability Seamless digital distribution partnerships with a wide range of companies e.g. PFMs, retailers, real estate, automotive, affinity organizations. Platforms aggregating customer insurance holdings and using a suite of insurance and banking APIs to identify: • Areas of over/under insurance • Appropriate excesses and limits • Cover better suited to customer needs • Better renewal quotes Open data speeding up and tailoring quotes e.g. land registry, satellite imagery, mobile phone number. Transferable driver behavior and usage data, combined with e.g. roads travelled, associated accident rates, typical weather conditions, for tailored pricing. Partner APIs to identify company specific, real-time cyber risks, improving cyber pricing, underwriting and risk mitigation. Opening access to proprietary risk and pricing models e.g. mortality risk scoring. Satellite / sensor technology providing real-time risk management alerts based on e.g. flood / rainfall. Policy service / administration requests seamlessly handled through 3rd party digital channels. Administration plug-in: Reducing market inefficiency and duplication of effort in commercial insurance (e.g. KYC/AML checks). Parametric travel policies that instantly pay compensation when a flight is delayed for more than two hours. Telematics or OEM data providing FNOL and instant accident reconstruction data. Automatic image-based loss assessment and claims payments with shared APIs across ecosystem. Monetizing proprietary databases (e.g. car parts) and labor costs (e.g. healthcare treatment costs). CUSTOMER ACQUISITION AND DISTRIBUTION PROPOSITION DEVELOPMENT UNDERWRITING POLICY ADMINISTRATION AND SERVICING CLAIMS 6Copyright 2018 Accenture. All rights reserved.
  • 7. OPEN INSURANCE: THE STATE OF PLAY Without the regulatory impetus driving banking to open up, insurance carriers are taking only tentative steps into open insurance. Source: Accenture Research Insurance API Watch Tower, Programmable web. Note: Cumulative number of APIs 7Copyright 2018 Accenture. All rights reserved. Insurance APIs are dwarfed by those in other FS sectors, but growth is picking up.
  • 8. Legacy systems are ill- equipped to handle multiple partnerships and ecosystems, let alone personalized interactions and flexible propositions. The insurance industry lags other sectors in Accenture’s Ecosystem Capability Index, especially in the areas of talent, culture, strategy and innovation. WHAT’S HOLDING OPENINSURANCE BACK? The realities of implementation and concerns around the implications of open architecture are hampering its development: Insurers and consumers are uneasy about sharing data. 1. 2. 3. 8Copyright 2018 Accenture. All rights reserved.
  • 9. HOW TO CAPTURE OPEN INSURANCE OPPORTUNITIES 3. 2. 1. TECHNOLOGY Build API-enabled, data-rich (open) architecture ORGANIZATION Assess and understand current capabilities and gaps to create agile and innovative organizations PARTNERSHIPS Develop new strategies, capabilities and models 9Copyright 2018 Accenture. All rights reserved.
  • 10. THE PROMISE OF A DIFFERENT FUTURE FOR INSURERS AND CUSTOMERS Open insurance could transform insurance value propositions and business models. 1 But for early adopters of open insurance, the potential rewards are great. It ensures new revenue streams, increased customer engagement, and continued market relevance Adoption laggards risk putting themselves at a steep competitive disadvantage. 2 3 4 10Copyright 2018 Accenture. All rights reserved.

Editor's Notes

  1. Launched in 2016 to recognize and promote innovation in the industry. Encouraging insurers to explore new ways of growing their business, the awards celebrate the best new ideas that are transforming our industry – and serve to spark further innovation. In 2018 we introduced a stand-alone category for insurtech. Insurtechs can only enter the other awards categories by partnering with their clients who must make the submission. In 2018 we had 320 submissions – with 29% coming from Insurtech category Other 2018 edition highlights included: 46% increase in entries from 2017 131 delegates from 24 countries attended the awards ceremony including senior leaders from Allianz, AXA, Generali, Groupama, Intrasurance, Liberty Mutual & Tokio Marine. Tokio Marine was named the Global Innovator of the Year, joining the ranks of AXA and Generali in previous editions. NA Chapter launched to help create visibility for the awards in the US & Canada (where Efma does not have a significant presence with its roots in Europe): 55 submissions received: double on 2017’s 26 submissions Supporting digital campaign launched to drive visibility An awards ceremony that was aligned to the IIEB took place on 24 October in Boston (recognizing 4 winners in Best customer-experience, product or service <Metlife>, Best claims, underwriting, IoT or ecosystem innovation <Munich Re.>, Insurtech, NA Innovator of the Year <USAA>) 43 delegates attended from insurance leaders like USAA, John Hancock, Allianz USA, Aflac, Travelers and Nationwide 6 pitches in 2 categories
  2. Launched in 2016 to recognize and promote innovation in the industry. Encouraging insurers to explore new ways of growing their business, the awards celebrate the best new ideas that are transforming our industry – and serve to spark further innovation. In 2018 we introduced a stand-alone category for insurtech. Insurtechs can only enter the other awards categories by partnering with their clients who must make the submission. In 2018 we had 320 submissions – with 29% coming from Insurtech category Other 2018 edition highlights included: 46% increase in entries from 2017 131 delegates from 24 countries attended the awards ceremony including senior leaders from Allianz, AXA, Generali, Groupama, Intrasurance, Liberty Mutual & Tokio Marine. Tokio Marine was named the Global Innovator of the Year, joining the ranks of AXA and Generali in previous editions. NA Chapter launched to help create visibility for the awards in the US & Canada (where Efma does not have a significant presence with its roots in Europe): 55 submissions received: double on 2017’s 26 submissions Supporting digital campaign launched to drive visibility An awards ceremony that was aligned to the IIEB took place on 24 October in Boston (recognizing 4 winners in Best customer-experience, product or service <Metlife>, Best claims, underwriting, IoT or ecosystem innovation <Munich Re.>, Insurtech, NA Innovator of the Year <USAA>) 43 delegates attended from insurance leaders like USAA, John Hancock, Allianz USA, Aflac, Travelers and Nationwide 6 pitches in 2 categories
  3. Launched in 2016 to recognize and promote innovation in the industry. Encouraging insurers to explore new ways of growing their business, the awards celebrate the best new ideas that are transforming our industry – and serve to spark further innovation. In 2018 we introduced a stand-alone category for insurtech. Insurtechs can only enter the other awards categories by partnering with their clients who must make the submission. In 2018 we had 320 submissions – with 29% coming from Insurtech category Other 2018 edition highlights included: 46% increase in entries from 2017 131 delegates from 24 countries attended the awards ceremony including senior leaders from Allianz, AXA, Generali, Groupama, Intrasurance, Liberty Mutual & Tokio Marine. Tokio Marine was named the Global Innovator of the Year, joining the ranks of AXA and Generali in previous editions. NA Chapter launched to help create visibility for the awards in the US & Canada (where Efma does not have a significant presence with its roots in Europe): 55 submissions received: double on 2017’s 26 submissions Supporting digital campaign launched to drive visibility An awards ceremony that was aligned to the IIEB took place on 24 October in Boston (recognizing 4 winners in Best customer-experience, product or service <Metlife>, Best claims, underwriting, IoT or ecosystem innovation <Munich Re.>, Insurtech, NA Innovator of the Year <USAA>) 43 delegates attended from insurance leaders like USAA, John Hancock, Allianz USA, Aflac, Travelers and Nationwide 6 pitches in 2 categories
  4. Launched in 2016 to recognize and promote innovation in the industry. Encouraging insurers to explore new ways of growing their business, the awards celebrate the best new ideas that are transforming our industry – and serve to spark further innovation. In 2018 we introduced a stand-alone category for insurtech. Insurtechs can only enter the other awards categories by partnering with their clients who must make the submission. In 2018 we had 320 submissions – with 29% coming from Insurtech category Other 2018 edition highlights included: 46% increase in entries from 2017 131 delegates from 24 countries attended the awards ceremony including senior leaders from Allianz, AXA, Generali, Groupama, Intrasurance, Liberty Mutual & Tokio Marine. Tokio Marine was named the Global Innovator of the Year, joining the ranks of AXA and Generali in previous editions. NA Chapter launched to help create visibility for the awards in the US & Canada (where Efma does not have a significant presence with its roots in Europe): 55 submissions received: double on 2017’s 26 submissions Supporting digital campaign launched to drive visibility An awards ceremony that was aligned to the IIEB took place on 24 October in Boston (recognizing 4 winners in Best customer-experience, product or service <Metlife>, Best claims, underwriting, IoT or ecosystem innovation <Munich Re.>, Insurtech, NA Innovator of the Year <USAA>) 43 delegates attended from insurance leaders like USAA, John Hancock, Allianz USA, Aflac, Travelers and Nationwide 6 pitches in 2 categories
  5. Launched in 2016 to recognize and promote innovation in the industry. Encouraging insurers to explore new ways of growing their business, the awards celebrate the best new ideas that are transforming our industry – and serve to spark further innovation. In 2018 we introduced a stand-alone category for insurtech. Insurtechs can only enter the other awards categories by partnering with their clients who must make the submission. In 2018 we had 320 submissions – with 29% coming from Insurtech category Other 2018 edition highlights included: 46% increase in entries from 2017 131 delegates from 24 countries attended the awards ceremony including senior leaders from Allianz, AXA, Generali, Groupama, Intrasurance, Liberty Mutual & Tokio Marine. Tokio Marine was named the Global Innovator of the Year, joining the ranks of AXA and Generali in previous editions. NA Chapter launched to help create visibility for the awards in the US & Canada (where Efma does not have a significant presence with its roots in Europe): 55 submissions received: double on 2017’s 26 submissions Supporting digital campaign launched to drive visibility An awards ceremony that was aligned to the IIEB took place on 24 October in Boston (recognizing 4 winners in Best customer-experience, product or service <Metlife>, Best claims, underwriting, IoT or ecosystem innovation <Munich Re.>, Insurtech, NA Innovator of the Year <USAA>) 43 delegates attended from insurance leaders like USAA, John Hancock, Allianz USA, Aflac, Travelers and Nationwide 6 pitches in 2 categories
  6. Launched in 2016 to recognize and promote innovation in the industry. Encouraging insurers to explore new ways of growing their business, the awards celebrate the best new ideas that are transforming our industry – and serve to spark further innovation. In 2018 we introduced a stand-alone category for insurtech. Insurtechs can only enter the other awards categories by partnering with their clients who must make the submission. In 2018 we had 320 submissions – with 29% coming from Insurtech category Other 2018 edition highlights included: 46% increase in entries from 2017 131 delegates from 24 countries attended the awards ceremony including senior leaders from Allianz, AXA, Generali, Groupama, Intrasurance, Liberty Mutual & Tokio Marine. Tokio Marine was named the Global Innovator of the Year, joining the ranks of AXA and Generali in previous editions. NA Chapter launched to help create visibility for the awards in the US & Canada (where Efma does not have a significant presence with its roots in Europe): 55 submissions received: double on 2017’s 26 submissions Supporting digital campaign launched to drive visibility An awards ceremony that was aligned to the IIEB took place on 24 October in Boston (recognizing 4 winners in Best customer-experience, product or service <Metlife>, Best claims, underwriting, IoT or ecosystem innovation <Munich Re.>, Insurtech, NA Innovator of the Year <USAA>) 43 delegates attended from insurance leaders like USAA, John Hancock, Allianz USA, Aflac, Travelers and Nationwide 6 pitches in 2 categories
  7. Launched in 2016 to recognize and promote innovation in the industry. Encouraging insurers to explore new ways of growing their business, the awards celebrate the best new ideas that are transforming our industry – and serve to spark further innovation. In 2018 we introduced a stand-alone category for insurtech. Insurtechs can only enter the other awards categories by partnering with their clients who must make the submission. In 2018 we had 320 submissions – with 29% coming from Insurtech category Other 2018 edition highlights included: 46% increase in entries from 2017 131 delegates from 24 countries attended the awards ceremony including senior leaders from Allianz, AXA, Generali, Groupama, Intrasurance, Liberty Mutual & Tokio Marine. Tokio Marine was named the Global Innovator of the Year, joining the ranks of AXA and Generali in previous editions. NA Chapter launched to help create visibility for the awards in the US & Canada (where Efma does not have a significant presence with its roots in Europe): 55 submissions received: double on 2017’s 26 submissions Supporting digital campaign launched to drive visibility An awards ceremony that was aligned to the IIEB took place on 24 October in Boston (recognizing 4 winners in Best customer-experience, product or service <Metlife>, Best claims, underwriting, IoT or ecosystem innovation <Munich Re.>, Insurtech, NA Innovator of the Year <USAA>) 43 delegates attended from insurance leaders like USAA, John Hancock, Allianz USA, Aflac, Travelers and Nationwide 6 pitches in 2 categories