Digital disruption transforms insurance distribution in Nigeria
A variety of well-documented, strengthening trends are causing insurance distribution to be transformed at an ever-accelerating pace. Carriers that are resisting the imperative to change are standing firm in the face of higher service standards, rising customer expectations, continuous digital innovation and a wealth of emerging opportunities for growth. Arguably the greatest – and most disruptive – of these opportunities is the Internet of Things (IoT), which not only enables insurers to better understand their customers and improve their interactions with them; it is also driving the expansion of insurance beyond indemnification to real-time protection.
To gain a comprehensive perspective of insurers’ responses to the disruption of their business and operating models, Accenture polled more than 400 senior executives at large and medium-sized life, P&C (both personal lines and small commercial) and multiline carriers in 20 countries (see About the Research on page 4). All are responsible for or involved in their companies’ distribution and agency management functions. The survey found that insurance companies are accelerating the shift to a radically different distribution model, where digital plays an increasingly important role in the majority of interactions, and agents’ efforts are being refocused to add more value. Only one out of five carriers reject this model (Figure 1)
Respondents also reported that their organizations are, to an increasing degree, defining strategies or piloting or launching products and services that take advantage of the IoT. The momentum is evident in their expectation of a two- to three-fold increase in connected insurance initiatives over the next three years, not only in the more mature area of auto telematics, but also in homes and buildings, health and fitness monitors, and other wearables. An analysis of the survey findings shows there are six key distribution-related areas insurers are concentrating on:
- Channel digitization
- Insight-driven customer experiences
- The changing role of the agent
- The future of aggregators
- The role of ecosystems
- The Internet of Things Each of these demands clear strategies. Many of the forces that are shaping the future of insurance are beyond the control of insurers. They include customers’ demand for ‘living services’ that are designed around the needs of individuals as opposed to generic services defined by an organization for mass consumption (see page 3). A dizzying succession of technological and other innovations are also challenging the traditional insurance business model. Insurers need to move beyond a succession of pilots and commit to their chosen business and distribution models in ways that will deliver profitable growth for the future. The decisions they make today will determine not only the kind of customer experiences they will provide to remain competitive, but in fact the kind of businesses they will be in the years to come.