Sneak peek: Is the industry ready for insurance platforms?

0 September 6, 2018 at 8:00 am by

Next week, we will be releasing a new IBM Institute for Business Value study on the insurance industry. Titled “The platform-fueled future,” we surveyed 1,000 insurers across 35 countries on various questions of interest around insurance platforms – on their disruptive impacts, benefits, downsides and how much or how little participation they are envisioning.

We split our sample into outperforming insurers and the rest using the criteria of premium growth and operational efficiency. This allows for some very interesting comparisons across insurers.

For example, 85% percent of outperforming insurers, and 54% of the others, feel that platforms are disrupting the insurance industry. Yet only outperformers are preparing – 70%, accept that THEY themselves will be disrupted, and 71% are adjusting their strategy. The average insurer, on the other hand, thinks that the coming disruption is not their problem – only 29% state that it affects their own organization, and even less are preparing, at 21%.

I have been doing insurance studies for the IBM Institute for Business Value for 12 years, and by now this finding has become typical when looking at emerging technologies. A common theme has emerged that outperformers understand and accept the disruption, while others do not. This makes the future “survival of the fastest“ that we envisioned one of our recent studies “Insurance 2025“ all the more likely.¹

Many insurers, almost all outperformers and many of the rest, do or plan to participate in a platform. What elements should platforms have? Here some charts to help answer that question:

Most agree they should cover common insurance functions (that’s the point, after all). And about two-thirds of outperformers state that contributors should have an easy time adding their services to the platform using embedded tool.

As the second chart shows, almost three quarters of outperformers and slightly more than half of others, agree that insurance platforms aren’t just for insurers – anything that is relevant to risk is good for the platform. Which again makes a lot of sense, since platforms create interaction among participants through a marketplace or ecosystem. The more different players in the ecosystem, the higher the value of the platform will be.

I hope I have generated some interest in the study. Look out for more tidbits from me via Twitter on @chbieck in the next few days, and of course, please check back here for a new post next week when the study will be released.

¹If you are interested in our insurance crystal ball, you can also check out the interview on the study here.

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