The Digital InsurerHow Insurers Can Unlock the Digital’s Potential

May 1, 2014

Copyright © 2014 Accenture All rights reserved. 2

Big Bang Disruption

2Copyright © 2014 Accenture All rights reserved.

• Disruptive technological innovations have historically started out cheap and simple, gradually improving until they challenged incumbents

• Today, new products are perfected with a few trial users and then embraced quickly by the market, wiping out incumbents in a flash

• Regulated industries are especially vulnerable

- When the law limits competition, businesses have little incentive to innovate

- Once the disrupter finds a way in, the collapse is much more sudden

Customers’ are willing to adopt of new channels for interacting with their insurers

When did you first purchase insurance through the following channels?

Channels used for over 2 years Most recent channels

62%

Online

38%

60%

Retailer

40%

57%

Insurance company

telephone service

43%

52%

Bank

48%

39%

Insuranceagent

61%

39%

Independent agent/ broker

61%

38%

Your employer

62%

<2 years ago

>2 years ago

Copyright © 2014 Accenture All rights reserved. 3

The ‘switching’ economy for insurance is estimated at $400 billion in premium

4

• Personal-lines P&C and life insurance worldwide, 2013

• Total premiums multiplied by the switching factor

Copyright © 2014 Accenture All rights reserved. 4

Digital Business vs. Digitizing the Business

Cost/Margin

Revenue

Today

New & New

Digitize Processes

New & Old

Digital Business

Feeling DigitalApplying new technology to old operations

Being DigitalCombining new technology with new operations

Copyright © 2014 Accenture All rights reserved. 5

Insurers are in the middle of the pack in terms of digital investments and results

Results/Benefits

Investments

3.4

3.3

3.2

3.1

3.0

2.9

2.8

2.7

2.6

2.5

2.4

2.3

2.2

2.1

2.0

1.9

1.8

1.7

1.6

1.52.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.0

Defense

Natural Resources

Utilities

Energy

Automotive

M&E

Retail

CG&S

Insurance

Capital Markets

Industrial Equipment

Banking

AF&TLS

Health I&TS

Chemicals

E&HT

Life SciencesGovernment

FY13-17 CAGR at or above average of 14.2%

FY13-17 CAGR below average of 14.2%

Communications

Copyright © 2014 Accenture All rights reserved. 6

Digital high performers in financial services industry outcompete their peers over time

2.Large P&C Company

Digital Maturity

8.Very Large Asset Mgmt. Company

Market Share % Improvement (2008-2013)

4.

10.

3.

6. 1.Large P&C Company

-10%-20%-30%-40% 40%10% 30%20%

5.

7.

High

Low

Copyright © 2014 Accenture All rights reserved. 7

13.Large Life Insurance

Company

14.Large Life Insurance

Company

Its time for a different definition of Digital

Copyright © 2014 Accenture All rights reserved. 8

Digital technology provides savvy executives with the means to turn technology into business results, innovation and value

• Digital (adj.): increasing information intensity and connectedness of customer and business resources.

• Digitize (verb): applying technology to customer and business resources.

• Digital Business (noun): an organization that incorporates digital technology to create revenue and results via innovative strategies, products, processes and experiences.

Human Ability x Capability^Information

Technology

Copyright © 2014 Accenture All rights reserved. 9

Design from the customer’s perspective “outside-in”

Integrate all channels and customer touch points

Execute flawlessly and consistently across touch points

Continuously upgrade products and services

Make digital core to the business model

The challenge is to invent products and services so beloved by customers that they will pay more for them

Copyright © 2014 Accenture All rights reserved. 10

Companies that lead in customer satisfaction:

Digital business principles and imperatives

• Put Outcomes over Processes

• Start and Finish Outside-In

• Build Platforms

• Organize for Change

• Customer Experience

• Cross Channel Excellence

• Operational Simplicity

• Execution Agility

Principles Imperatives

Copyright © 2014 Accenture All rights reserved. 11

A Roadmap for the Digital Insurer

Do the business right

Innovative and TransformativeCustomer Experience

CustomerCentricity

Cross Channel Excellence

Operational Simplify

Superior Execution Agility

Standalone

Multi-channel

Connected

Interactive

Digital• Claims• Underwriting• Product Manufacturing

• Marketing• Distribution• Policy & Contract Mgmt

Copyright © 2014 Accenture All rights reserved. 12

Becoming a Digital Business is different from doing digitized marketing or digitized operations

Internal Focus

External Focus

Digitize Processes

Revenue

Profit Margin

Digitize Channels

Digitize Marketing

DigitalizeOperations

DigitalBusiness

Digital Transformation

Copyright © 2014 Accenture All rights reserved. 13

Three recipes for digital business success

Where will organizations write their digital future?

Product+ Connections= Service

Service+ Information= Experience

Experience+ Platform= Outcomes

Blackboard: Digitizing Internal Operations

Whiteboard: Digitizing External Marketing

Tablet: Creating New Value Propositions

Copyright © 2014 Accenture All rights reserved. 14

The Digital Insurer: Delivering Exceptional Customer Experiences

The Digital Insurer:What does it take to be a Digital Insurer?

The Digital Insurer:Accenture 2013 Consumer-Driven Innovation Survey

Accenture Thought Leadership

Copyright © 2014 Accenture All rights reserved. 15