The-Rise-of-InsurTech

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ACCENTURETHERISEOFROYJUBRAJCONTACTDigital&InnovationLead,UK&IrelandFinancialServicesINSURTECHTHEkadesh.r.jubraj@accenture.comAUTHORSSTEVENWATSONInsurTechLead,UKInsurancesteven.watson@accenture.comSIMONTOTTMANInsuranceResearchLead,UK&Irelands.tottman@accenture.comABOUTACCENTUREAccentureisaleadingglobalprofessionalservicescompany,providingabroadrangeofservicesandsolutionsinstrategy,consulting,digital,technologyandoperations.Combiningunmatchedexperienceandspecialisedskillsacrossmorethan40industriesandallbusinessfunctions—underpinnedbytheworld’slargestdeliverynetwork—Accentureworksattheintersectionofbusinessandtechnologytohelpclientsimprovetheirperformanceandcreatesustainablevaluefortheirstakeholders.Withmorethan375,000peopleservingclientsinmorethan120countries,Accenturedrivesinnovationtoimprovethewaytheworldworksandlives.Visitusatwww.accenture.com.ACCENTURE’SINSURTECHPROGRAMMEAspartofourFinTechInnovationLabinLondon,AccenturehasbeenworkingcloselywithInsurTechstartupsandinsurersoverthepastfivemonths.ItisthefirstyearthatInsurTechhasbeenallocateditsownspecificworkstreamwithintheglobalAccentureprogramme.OversixtystartupsappliedtobepartoftheInsurTechworkstream(whichalsoinvolvesthirteeninsurers),andtheprogrammeeventuallyselectedfivestartupsfocusingonSocialData,ArtificialIntelligence,Distribution,EnhancedTelematics,andRiskProfiling.Duringtheprogramme,Accenturesupportedcollaborationbetweenthestartupsandtheinsurers,gaininguniqueinsightintothechallenges,learningsandopportunitiesInsurTechbringstotheindustry.Thestartupsthemselvesdevelopedtheirbusinesspropositionstoensuretheyweremarket-readyandaddressingaspecificpartoftheinsurancevaluechain.Theinsurancepartnersgainedvaluableinsightsintothenewtechnologiescomingintothemarket,andwerealsoabletodevelopandenhancetheirowninnovationagendas.Applicationforthe2017-18programmewillopeninSeptember2017.Formoredetailsvisitwww.fintechinnovationlablondon.co.ukorfollowusonTwitter@FinTechLabLDN.Copyright©2017AccentureMADEBYACCENTURERESEARCHAllrightsreserved.AccentureResearchisaglobalteamofindustry,geographic,economicanddigitaltechnologiesanalystswhoprovidedata-driveninsightsthatidentifydisruptors,opportunitiesandrisksforAccentureanditsclients.Theyuseinnovativebusinessresearchtechniquessuchaseconomicvaluemodeling,analytics,crowdsourcing,expertnetworks,surveys,Accenture,itslogo,andHighPerformancedata-visualizationandresearchwithacademicandbusinesspartnerstocreateprovocativepointsofviewspublishedDeliveredaretrademarksofAccenture.byAccentureeveryyear.TheresearchinthisstudywasledbyAccentureResearch.InsuranceResearchLead,UK&Ireland ACCENTURETHERISEOFINSURTECHHOWYOUNGSTARTUPSANDAMATUREINDUSTRYCANBRINGOUTTHEBESTINONEANOTHER ACCENTUREACCENTURETHERISEOFINSURTECHWhilesomeofthisdisruptionistraditionalinsurersaremorethan300undeniablycomingfromInsurTech,yearsold,whereasmanyInsurTechsareINTROmosttraditionalinsurersstillperceivelessthan300daysold.ThiscanleadtoHOWYOUNGtheirexistingcompetitorsasposingthesignificantchallengesanddifferencesDUCgreatestriskofdisruption(seeFigure2).surroundingculture,workforce,Assuch,thereisagrowingrecognitionagilityandtechnology.ItcanalsoTIONamonginsurersthatInsurTechultimatelyleadtomisconceptionsonbothsidesSTARTUPSrepresentsmoreofanopportunitythanand,occasionally,alackofcommonathreat,andthattheyshouldseektounderstandingaboutthesizeofancollaboratemorecloselywiththislatestopportunityorhowbesttorealiseit.Insurersrecognisethattheeverydaylivesbreedoftechnology-fuelledstartups.ANDAMATUREoftheircustomersarebeingtransformedAccenture’sTechnologyVisionforThesechallengeshavenotpreventedbynewtechnologies.TheyalsorecogniseInsurance2016revealed,forinstance,thatthenumberandvalueofInsurTechthatthistransformationisaffecting44percentofinsurersacrosstheworlddealsfromsoaringinrecentyears.Buttheirownindustry,whichisundergoingintendtopursuedigitalinitiativeswithifbothstartupsandincumbentinsurersINDUSTRYCANanecosystemdisruptioncausedbystartupsfromtheinsuranceindustryoveraretoextractmaximumvaluefromthetechnology-drivennewentrantsandthenexttwoyears.And,perhapsmoreInsurTechscene,changesinmindsetandexistingcompetitorsalike.Insurersareinterestingly,31percentplantoworkwithapproachmayberequired.Thereisalsothusfacingincreasingpressuretoevolvestartupsfromoutsidethatindustry.apressingneedforinsurerstointegrateBRINGOUTTHEandreinventthemselvesbeforethattheirInsurTechapproachintotheirdisruptionhitsthebottomlineButcollaborationbetweenoldandnewbroaderinnovationagendas.BESTINONE(seeFigure1).isnotalwaysstraightforward.SomeANOTHERFIGURE1FIGURE2INSURERSAREFACINGTRADITIONALINSURERSDISRUPTIONANDNEEDPERCEIVESTARTUPSTOBETOEVOLVEQUICKLYLESSOFATHREATTHANDatafromAccenture’sTechnologyEXISTINGCOMPETITORSVisionforInsurance2017Entitiesviewedbyinsurersasposingthegreatestriskofdisruptiontotheinsuranceindustry,2016STARTUPSFROMOUTSIDE...ofinsurersagreeINSURANCE(27%)thattechnologyisnolongeradvancing87%inalinearfashion,ESTABLISHEDbutratheratanCOMPANIESexponentialrateWITHININSURANCE(37%)...ofinsurersbelievetheymustinnovateat86%anincreasinglyrapidpacesimplytoretainSTARTUPSWITHINacompetitiveedgeINSURANCE(24%)...ofinsurersthinkthat96%digitalecosystemsarehavinganimpactonESTABLISHEDCOMPANIEStheinsuranceindustryFROMOUTSIDEINSURANCE(22%)3 3ACCENTUREINSURTECHISBIGBUSINESSAnditssizeandreachisexpandingTherearesignsthatthebroaderFinTechDatafromCBInsightsrevealsthatglobalindustrymayhavereachedanewlevelInsurTechinvestmenttotalledUS$1.7bnofmaturity,withinvestmentinsomein2016,withboththevolumeandvalueregionsbeginningtocooloff.NotsoforofdealshavingroughlydoubledsinceInsurTech.Thereisagrowingrecognition2014.Furthermore,InsurTechisnowacrossthefinancialservicessectorthat,atrulyglobaltrend.WhilemorethanwhilebankingandcapitalmarketsbuilthalfofalldealsstilltakeplaceintheUSupaconsiderableweightadvantageby(whoseprimaryInsurTechhubsareSiliconstartingtheirFinTechjourneysearlier,itisValley,SanFranciscoandNewYork),thetheinsuranceindustrythatwillultimatelyUK,Germany,ChinaandIndiaarenowseethegreatestbenefit–andthehighestsignificantmarketsintheirownright.Andlevelsofdisruption–fromthisglobalmanyothercountriesarefollowingsuit.upsurgeofinnovation.4 3ACCENTUREACCENTUREINSURTECHFIGURE324THENUMBEROFINSURTECHSFOCUSINGONANALYTICSANALYTICS/50ORBIGDATAHASALMOSTBIGDATATRIPLEDINTWOYEARS69NumberofInsurTechdealsinvolvingeachselectedtypeoftechnologyISBIGARTIFICIAL9INTELLIGENCE20/INTELLIGENTAUTOMATION30INTERNET62014BUSINESSOFTHINGS/92015CONNECTEDAnditssizeandreachisexpandingINSURANCE222016TherearesignsthatthebroaderFinTechDatafromCBInsightsrevealsthatglobalWhatisdrivingthisgrowth?Theanswerdealstakingplaceduring2016featuredforexample.Assuch,insurershaveforindustrymayhavereachedanewlevelInsurTechinvestmenttotalledUS$1.7bnliespartlyintheemergenceofacohortaninsureroritsstrategicventurearm.Butsometimebeenplayingamoresignificantofmaturity,withinvestmentinsomein2016,withboththevolumeandvalueofstartupswhoseproductsleveragethisnumberdoesrepresentasignificantroleinfundingfuturetechnologiesthanregionsbeginningtocooloff.Notsoforofdealshavingroughlydoubledsincetechnologiessuchasanalytics,artificialincreaseovertheprecedingtwoyears–uptheInsurTechnumbersaloneimply.InsurTech.Thereisagrowingrecognition2014.Furthermore,InsurTechisnowintelligence(AI)andtheInternetoffrom3percentin2014and12percentinFurthermore,asInsurTechbecomeseveracrossthefinancialservicessectorthat,atrulyglobaltrend.WhilemorethanThings(IoT).Thesearethreeelements2015.Thispositiveshiftshowsthatinsurersmoreestablished,agreaternumberofwhilebankingandcapitalmarketsbuilthalfofalldealsstilltakeplaceintheUStheinsuranceindustryviewsascriticalarewillingtowageranincreasinglylargeinsurerswilllikelychannelmoreoftheirupaconsiderableweightadvantageby(whoseprimaryInsurTechhubsareSiliconindeliveringincreasedlevelsofstakeinthefutureoftheirownindustry.fundingactivitiesthere,anddrivefurtherstartingtheirFinTechjourneysearlier,itisValley,SanFranciscoandNewYork),thepersonalisationandbetterreal-worldgrowthintheInsurTechspace.theinsuranceindustrythatwillultimatelyUK,Germany,ChinaandIndiaarenowoutcomesforcustomers.Accenture’sInsurers’investmentsmightrepresentseethegreatestbenefit–andthehighestsignificantmarketsintheirownright.Andanalysisofmorethan450InsurTechdealsjustasmallproportionoftotalInsurTechlevelsofdisruption–fromthisglobalmanyothercountriesarefollowingsuit.showshowthenumberofdealsrelatingfunding,butthesecompaniesareactuallyupsurgeofinnovation.toeachofthesetechnologiesroughlyinvestingsignificantlylargeramountsintripledbetween2014and2016(seeFigureothertypesofstartup.Accenture’sglobal3).Thistriooftechnologiescollectivelyanalysisofinvestmentsmadein2016byaccountedfor56percentofthetotal75leadinginsurersrevealedthatonlynumberofdealsthattookplacein2016–17percentofdealsrelatedtoInsurTechandapproximately70percentofthetotalcompanies;theother83%relatedtovalueinvested.startupsfromoutsidetheInsurTechspace,butoftenwithafocusontechnologiesthatWhatisnotableaboutthisfundingisholdpotentialfortheinsuranceindustrythatitismainlycomingfromoutsidetheinthefuture.Insurershaveroutinelytraditionalinsuranceandreinsurancefundedstartupsdealingwithpayments,space.Just14percentoftheInsurTechanalytics,dataprotection,andhealthcare,45 3Awaveofstartup-driveninnovationisputtinginsurers’approachestoinnovationandtechnologyundertheACCENTUREspotlight,highlightingthechallengesthesetraditionalcompaniesoftenface.Themajorityoflargeretailandinvestmentsometimesfindtheirprogrammesaretheinsurertrustnewpartners?CanitbanksembracedtheFinTechconceptnotdeliveringasmuchvalueastheytrustnewsourcesofdata?Isitwillingseveralyearsago.Theirinnovationmight.Otherinsurersareyettotakeanytofundamentallychangehowitdoesagendasanddigitalstrategiesarenowsubstantiveactionatall,anddonotevenbusiness,orconsideralternativeoperatingrelativelymatureasaresult,andthereknowtheirowninnovationapproach,letmodels?Howwillitalignwithastartup’sistypicallysignificantsupportforthesealonehowtocollaboratewiththemyriadculture,workforce,agilityandtechnology?programmesamongtheC-suite.ThenewpartnersandtechnologiesfloodingThedifferencesinapproachbetweenapicturewithininsuranceismoremixed.theindustry.300-year-oldinsureranda300-day-oldWhilemanyinsurersarealreadyactiveInsurTechmaybestark.inthisarea–inhavingwell-definedEveryinsurer,irrespectiveofwhereitsitsinnovationagendasorrunningtheironthisspectrum,facessomecommonownincubators,forexample–theycanchallenges.Innovationcanberisky.CanInsurTechsneedkeyareasofcommongroundwherejumptothenew.Furthermore,itwillbetraditionalinsuranceandInsurTechcanvitaltodeterminewherethesolutionandtounderstandmeet:dataandthecustomer.businessboundariesbetweenInsurTechwhatthey’reandinsurersit,andtobeflexibleontheIfitsoundseasyintheory,therealitypartneringapproach.solvingfor,andismorechallenging.The‘300yearshowtointegrateversus300days’cultureconundrumisOnamorepracticallevel,InsurTechsabigstickingpoint.InsurTechinvolvesshouldbearinmindthattheirtechnologiesthemselvesintoagilebusinessapproaches,coupledwithareinherentlycutting-edge,whereasanindustrythataspiritof‘tryandsee’ratherthan‘learnmanyinsurers’legacyplatforms–whichwantstochangeanddo’.InsurTechculturedoesnottrulyarekeyforsystemintegration–arenot.understandtheinsuranceculture,andDecentralised,oldtechnologysurroundedbutdoesn’tstartupscanbecomefrustratedbythebytraditionalcorporateandITknowhow.Getsheersizeofinsuranceorganisationsgovernancestructurescanbedifficultandtheirrisk-adversecultures.wallstobreakdown.itrightandtheInsurTechsneedtorecognisethissizeoftheprizedisparityandamendtheirapproachesInsurTechsshouldalsoconsiderworking–forInsurTechs,tobusinessandmarketintegrationwithothertechnologyfirmstocreatewhiletheindustrygetsuptospeed.digitalecosystem-basedofferings.insurersandTraditionalinsurersareincreasinglyindeedtheThiswillrequirepatiencefromInsurTechs.cognizantoftheimportanceofTheymustunderstandtherealitiesofecosystems–Accenture’sTechnologycustomerthemarkettheyareentering,whichVisionforInsurance2016foundthat–ishuge.alsomeansrecognisingthattraditional83percentofinsurersthinkthedigitalinsurerswillneedtoembarkontheirowneconomyisdrivingamajorshiftinpowerculturalandtechnologicaljourneys.Areafromsupply-sideeconomiesofscaleInsuranceisadata-hungrybusiness,startup’sproductsandtechnologieswell-todemand-sideeconomiesbasedonandinsurersrecognisethatnewalignedwithaninsurer’scurrentstageofecosystems,forinstance.Furthermore,technologiessuchastheIoT,advanceddevelopment?Cleverstartupswillsupport94percentofinsurersviewadoptinganalytics,AIandBigDatawillbekeyinsurersontheirtransformationjourneysplatform-basedmodelsandformingtodrivingnewofferings.Insurersalsobytakingconsciousdecisionsoverspeeddigitalecosystemsascriticaltotherecognisetheneedtoimprovecustomerofimplementationandengagement.Babysuccessoftheirbusiness.experiencetokeeppacewithotherstepstoaninsurer’send-statemayproveindustries.Assuch,thereshouldbetwomorepalatablethanasingle,big6 3ACCENTUREAwaveofstartup-driveninnovationisputtinginsurers’HowdostartupsseethechallengesapproachestoinnovationandtechnologyundertheandmotivationsofworkingintheACCENTUREspotlight,highlightingthechallengesthesetraditionalinsurancespace?Customer-centricitycompaniesoftenface.andtheneedformutualunderstandingarehighonthewish-list.TwofoundingThemajorityoflargeretailandinvestmentsometimesfindtheirprogrammesaretheinsurertrustnewpartners?CanitbanksembracedtheFinTechconceptnotdeliveringasmuchvalueastheytrustnewsourcesofdata?IsitwillingCEOssharetheirthoughts.severalyearsago.Theirinnovationmight.Otherinsurersareyettotakeanytofundamentallychangehowitdoesagendasanddigitalstrategiesarenowsubstantiveactionatall,anddonotevenbusiness,orconsideralternativeoperatingrelativelymatureasaresult,andthereknowtheirowninnovationapproach,letmodels?Howwillitalignwithastartup’sistypicallysignificantsupportforthesealonehowtocollaboratewiththemyriadculture,workforce,agilityandtechnology?programmesamongtheC-suite.ThenewpartnersandtechnologiesfloodingThedifferencesinapproachbetweenapicturewithininsuranceismoremixed.theindustry.300-year-oldinsureranda300-day-oldWhilemanyinsurersarealreadyactiveInsurTechmaybestark.inthisarea–inhavingwell-definedEveryinsurer,irrespectiveofwhereitsitsinnovationagendasorrunningtheironthisspectrum,facessomecommonownincubators,forexample–theycanchallenges.Innovationcanberisky.CanRenaudMillionErikAbrahamssonCo-founder&CEOFounder&CEOofSPIXIIofDigitalFineprintWhydidyouIfeltthattheinsuranceindustrywasThefounderofWiredmagazineoncechoosetotargettheverytraditionalandsufferingfromaquippedthatallsuccessfulstartupsininsurancespace?communicationissuewithitscustomers,thepast10yearshavedoneonlyoneespeciallythedigitalcustomers.I’dthing:theyhavetakenwhatwasdoneexperiencedthisproblemmyselfwhenofflineandmoveditonline.Uber,Airbnbkeyareasofcommongroundwherejumptothenew.Furthermore,itwillbebuyingandclaiming–andIwasn’tandthewholeFintechphenomenonareInsurTechsneedtraditionalinsuranceandInsurTechcanvitaltodeterminewherethesolutionandalone.Forme,itwasclearthatinsuranceexamplesofthis.Insuranceisthelasttounderstandmeet:dataandthecustomer.businessboundariesbetweenInsurTechproductsshouldstartfromthecustomerremainingfrontierinthismegatrend,withandinsurersit,andtobeflexibleontheratherthanfrompre-existingprocesses.justoneintenpolicies(globally)beingwhatthey’resoldonlinetoday.SowedecidedtomoveIfitsoundseasyintheory,therealitypartneringapproach.solvingfor,andismorechallenging.The‘300yearsintoinsurancetohelpinsurersmakethehowtointegrateversus300days’cultureconundrumisOnamorepracticallevel,InsurTechstransition.abigstickingpoint.InsurTechinvolvesshouldbearinmindthattheirtechnologiesthemselvesintoagilebusinessapproaches,coupledwithareinherentlycutting-edge,whereasanindustrythataspiritof‘tryandsee’ratherthan‘learnmanyinsurers’legacyplatforms–whichWhatarethebiggestTounderstandtheindustrydeeply.Aswithanyregulatedindustry,ittakesaanddo’.InsurTechculturedoesnottrulyarekeyforsystemintegration–arenot.challengesfacingStartupswithlittleornopriorknowledgelongtimetogetyourinitialpropositionoffwantstochangeunderstandtheinsuranceculture,andDecentralised,oldtechnologysurroundedstartupsenteringoftheinsuranceindustrystruggletheground.Butoncethatdoeshappen,butdoesn’tstartupscanbecomefrustratedbythebytraditionalcorporateandIToralreadyoperatingtoquicklydemonstratetheirvaluegrowthcanfollowveryquickly.Thismeansknowhow.Getsheersizeofinsuranceorganisationsgovernancestructurescanbedifficultinthisarea?propositionandmaketangibleimpacts.thatstartupsareoftensimultaneouslyandtheirrisk-adversecultures.wallstobreakdown.Anothersignificantchallengeisrecruitinghavingtodealwithveryslowdecision-itrightandtheInsurTechsneedtorecognisethispeoplewhohavethat‘startupagile’spiritmakingandveryfastexecution,whichforsizeoftheprizedisparityandamendtheirapproachesInsurTechsshouldalsoconsiderworkingbutwhocanalsocopewiththeoftenslowsometeamscanfeelunbalanced.tobusinessandmarketintegrationwithothertechnologyfirmstocreatepaceoftheinsuranceindustry.–forInsurTechs,whiletheindustrygetsuptospeed.digitalecosystem-basedofferings.insurersandTraditionalinsurersareincreasinglyThiswillrequirepatiencefromInsurTechs.cognizantoftheimportanceofHoweasyisittopartnerOurapproachtonewpartnershipsisI’vebeenveryimpressedbyinsurers’indeedthesimple:weopenthediscussionbysharingwillingnesstolearn,andtheinvolvementTheymustunderstandtherealitiesofecosystems–Accenture’sTechnologyorcollaboratewithcustomerthemarkettheyareentering,whichVisionforInsurance2016foundthattraditionalinsurers,andwhySPIXIIexists,andaskinreturnwhyofthebroaderecosystem(analyticsfirms,–ishuge.alsomeansrecognisingthattraditional83percentofinsurersthinkthedigitalwhatcouldbedonetotheinsurerexists.SPIXIIexiststomakeconsultancies,conferencesandthemedia)insurerswillneedtoembarkontheirowneconomyisdrivingamajorshiftinpowerimprovetheseworkinginsurancesimple,accessibleandpersonalhasalsohelpedbridgethegapbetweenculturalandtechnologicaljourneys.Areafromsupply-sideeconomiesofscalerelationships?foreveryone.Ifthe‘why’oftheinsurerInsurTechsandtraditionalinsurers.ThatInsuranceisadata-hungrybusiness,startup’sproductsandtechnologieswell-todemand-sideeconomiesbasedonresonateswithours,thenthebasisofbeingsaid,wecanalwaysdomore.Oftenandinsurersrecognisethatnewalignedwithaninsurer’scurrentstageofecosystems,forinstance.Furthermore,understandingisset–therestisjustaboutitcomesdowntopersonalrelationstechnologiessuchastheIoT,advanceddevelopment?Cleverstartupswillsupport94percentofinsurersviewadoptingfiguringhowwecanworktogetherandbetweenyoungcompaniesandtheanalytics,AIandBigDatawillbekeyinsurersontheirtransformationjourneysplatform-basedmodelsandformingwhatitwilllooklike!incumbentsinthearea,andfindingtodrivingnewofferings.Insurersalsobytakingconsciousdecisionsoverspeeddigitalecosystemsascriticaltothewin-winpropositionsthatultimatelyrecognisetheneedtoimprovecustomerofimplementationandengagement.Babysuccessoftheirbusiness.benefitthecustomer.experiencetokeeppacewithotherstepstoaninsurer’send-statemayproveindustries.Assuch,thereshouldbetwomorepalatablethanasingle,big67 InsurTechsareprimarilytargetingthepersonalnon-lifeinsuranceACCENTUREspace,whereaslifeinsuranceandcommercialinsurancecouldberiperfortechnologicaldisruption.FIGURE4Whichsegmentsoftheinsurancetootherpartsoftheindustry:infact,THEMAJORITYOFindustryarebeingtargetedbystartups?theimpactofanalyticsandtheIoTonINSURTECHSAREFOCUSINGONTHENON-LIFESECTORAccenture’sanalysisofmorethan450commercialandindustrialinsurancecouldTotalnumberofInsurTechdeals,InsurTechdealsthattookplacebetweenbehuge.Thethirdrelatestocorporatesegmentedbytypeofinsurancebusiness2014and2016showsthatdealsrelatingcultureandthepaceofchange,andisspecificallytonon-lifeinsurancestillpotentiallyhardertoovercome:personalaccountformostInsurTechactivity,non-lifeinsurancebrandstypicallylieat26%25%althoughtheproportiondeclinedfrom69themorefashionableendoftheinsurance30%percentin2014to63percentin2016(seespectrum,non-lifeinsurersaretypically5%7%7%Figure4).Dealsrelatingspecificallytolifemoredigitallyinnovativethantheirlifeinsuranceaccountedforjust7percentinsurancecounterparts,andcommercialofthetotalin2016(andtheremaining31insuranceisevolvingatacomparativelypercentwereapplicabletobothnon-lifeslowerpace.andlifesectors).ButInsurTechsshouldnotfeelAccenture’sanalysisalsoshowsastrongdiscouragedfromtargetinglifeinsurance–andgrowing–biastowardspersonalandcommerciallines.Indeed,thesizelines.Just22percentofthedealstakingofthefinancialprizesonoffermight69%68%63%placeduring2016relatedtocommercialultimatelyprovelargerthanthoseinthe201420152016insurance,comparedwith40percentpersonalnon-lifespace.Furthermore,in2014(seeFigure5).ThischangemusttraditionalprovidersintheseareashaveMULTI-LINEbeseenincontext:thetotalnumberoftennotinvestedstronglyincustomerLIFEofInsurTechdealsmorethandoubledengagement,andstartupsthataretrulyNON-LIFEbetween2014and2016andso,inabsolutepassionateaboutimprovingcustomerterms,thenumberofcommercial-linesjourneyscoulddeliversignificantdealsdidshowaslightincreaseoverthattransformation.period.ButthatincreasewascompletelyoutstrippedbyrampantgrowthinInpractice,thedistinctionbetweenFIGURE5personal-linesactivity.personalandcommerciallinesneedCOMMERCIALLINESnotbeasclear-cutasmanystartupsAREINCREASINGLYBEINGOVERLOOKEDBYWhymightInsurTechsbeoverlooking,orinitiallythink.OftenthesameorsimilarINSURTECHSevenconsciouslyavoiding,lifeinsurancetechnologycanbeappliedtobothsectors.TotalnumberofInsurTechdeals,andcommerciallines?TherearethreecoreItisnotuncommonforInsurTechstosegmentedbytypeofinsurancecustomerexplanations.Thefirstisastraightforwardbegintheirjourneyswithonlypersonallackofawarenessandunderstandingoflinesinmind,buttoultimatelyendupthesepartsoftheindustry:startupsaretargetingcommerciallinespartners22%oftenfoundedandstaffedbyrelativelyalso.Accenturehasseenevidenceof28%youngpeoplewhosepersonalexperienceInsurTechsrepositioningthemselvesinthis40%ofinsurancemightbelimitedtobuyingwayaspartofitsFinTechInnovationLabtheirownnon-lifeproducts.ThesecondinLondon.Andcommercialinsurersareisamisplacedbeliefthatcutting-edgeincreasinglywillingtoexplorenewwaysoftechnologiesaresomehowlessapplicabledeliveringgreatervalue.60%72%78%201420152016COMMERCIALLINES8PERSONALLINES ACCENTUREInsurTechsareprimarilytargetingthepersonalnon-lifeinsuranceINSURERSAREWAKINGACCENTUREspace,whereaslifeinsuranceandUPTOINSURTECH,commercialinsurancecouldberiperfortechnologicaldisruption.BUTLAGBEHINDRETAILBANKSWHENITCOMESFIGURE4Whichsegmentsoftheinsurancetootherpartsoftheindustry:infact,THEMAJORITYOFindustryarebeingtargetedbystartups?theimpactofanalyticsandtheIoTonINSURTECHSAREFOCUSINGTOENGAGINGWITHONTHENON-LIFESECTORAccenture’sanalysisofmorethan450commercialandindustrialinsurancecouldTotalnumberofInsurTechdeals,InsurTechdealsthattookplacebetweenbehuge.ThethirdrelatestocorporatesegmentedbytypeofinsurancebusinessSTARTUPS.2014and2016showsthatdealsrelatingcultureandthepaceofchange,andisspecificallytonon-lifeinsurancestillpotentiallyhardertoovercome:personalaccountformostInsurTechactivity,non-lifeinsurancebrandstypicallylieatWhenitcomestodigitalandInsurersshoulddrawinspirationfrom26%25%althoughtheproportiondeclinedfrom69themorefashionableendoftheinsurance30%technologicalcollaborationwithstartups,theenthusiasticexamplesetbyretailpercentin2014to63percentin2016(seespectrum,non-lifeinsurersaretypically5%7%insurersaresignificantlylessdevelopedbanks.Theycanalsolearnfromthe7%Figure4).Dealsrelatingspecificallytolifemoredigitallyinnovativethantheirlifethantheirretailbankingcounterparts.differentmodelsemployedbybankswheninsuranceaccountedforjust7percentinsurancecounterparts,andcommercialAccenture’sproprietaryanalysis–usingengagingwiththeFinTechscene.Someofthetotalin2016(andtheremaining31insuranceisevolvingatacomparativelypubliclyavailableinformation–ofthechoosetoinvestinstartupsoracquirepercentwereapplicabletobothnon-lifeslowerpace.activitiesofmorethan200insurersthemoutright,forexample,whereasandlifesectors).and80retailbanksworldwidefoundothersseekamoreinformal,collaborativeButInsurTechsshouldnotfeelthatonly26percentofinsurerswereapproach.AndsomebankssimplytakeAccenture’sanalysisalsoshowsastrongdiscouragedfromtargetinglifeinsuranceprovidingmonetaryornon-monetaryinspirationfromstartupsandthenbuild–andgrowing–biastowardspersonalandcommerciallines.Indeed,thesizesupporttodigitalstartups(seeFigure6).theirownsolutionsin-house.Eachoftheselines.Just22percentofthedealstakingofthefinancialprizesonoffermight69%68%63%Furthermore,just17percentofinsurersfourapproacheshasitsprosandcons,placeduring2016relatedtocommercialultimatelyprovelargerthanthoseinthe201420152016hadanin-houseventurecapitalfund(orwhichmustbecarefullyconsideredinlineinsurance,comparedwith40percentpersonalnon-lifespace.Furthermore,equivalentinvestmentvehicle)targetingwithaninsurer’sobjectives.in2014(seeFigure5).ThischangemusttraditionalprovidersintheseareashaveMULTI-LINEthedigitalortechnologyspace.Thebeseenincontext:thetotalnumberoftennotinvestedstronglyincustomerLIFEproportionofretailbanksengagedintheseofInsurTechdealsmorethandoubledengagement,andstartupsthataretrulyNON-LIFEandsimilaractivitieswasapproximatelybetween2014and2016andso,inabsolutepassionateaboutimprovingcustomerdoublethefigureforinsurers.terms,thenumberofcommercial-linesjourneyscoulddeliversignificantdealsdidshowaslightincreaseoverthattransformation.period.ButthatincreasewascompletelyoutstrippedbyrampantgrowthinInpractice,thedistinctionbetweenFIGURE5personal-linesactivity.personalandcommerciallinesneedCOMMERCIALLINESnotbeasclear-cutasmanystartupsAREINCREASINGLYBEINGOVERLOOKEDBYWhymightInsurTechsbeoverlooking,orinitiallythink.OftenthesameorsimilarINSURTECHSevenconsciouslyavoiding,lifeinsurancetechnologycanbeappliedtobothsectors.TotalnumberofInsurTechdeals,FIGURE6andcommerciallines?TherearethreecoreItisnotuncommonforInsurTechstosegmentedbytypeofinsurancecustomerRETAILBANKSAREFARMOREexplanations.ThefirstisastraightforwardbegintheirjourneyswithonlypersonalACTIVETHANINSURERSWHENITCOMESTODEALINGlackofawarenessandunderstandingoflinesinmind,buttoultimatelyendupWITHSTARTUPSthesepartsoftheindustry:startupsaretargetingcommerciallinespartners22%%ofretailbanksandinsurersengagingineachactivity,2016oftenfoundedandstaffedbyrelativelyalso.Accenturehasseenevidenceof28%youngpeoplewhosepersonalexperienceInsurTechsrepositioningthemselvesinthis40%ofinsurancemightbelimitedtobuyingwayaspartofitsFinTechInnovationLab%OFFIRMSTHATWORKWITH60%STARTUPSORUNIVERSITIESONtheirownnon-lifeproducts.ThesecondinLondon.AndcommercialinsurersareDIGITALINITIATIVES38%isamisplacedbeliefthatcutting-edgeincreasinglywillingtoexplorenewwaysoftechnologiesaresomehowlessapplicabledeliveringgreatervalue.%OFFIRMSTHATPROVIDEMONETARY56%ORNONMONETARY(E.G.COACHING)SUPPORTTODIGITALSTARTUPS26%%OFFIRMSTHATHOSTINCUBATORS32%60%72%78%(E.G.PROVIDEOFFICESPACEORFACILITIES)FORDIGITALSTARTUPS14%201420152016%OFFIRMSTHATHAVEANIN-HOUSE32%COMMERCIALLINESVENTURECAPITALFUND(ORSIMILAR)RETAILBANKSTHATFOCUSESONDIGITAL17%8PERSONALLINESINSURERS9 InsurTechisnotasilverbullet–ACCENTUREtherealchallengeforinsurersistobecomemoreinnovativeintheireverydaybusiness.Thismeansnotholdingnewtechnologiesatarm’slength,andnottakingapiecemealapproachtoinnovation.Insurersneedtoembraceinnovationandcapabilities,forinstance.Equally,aspartofbusinessasusual.Simplytheinsurerwillmostlikelyfindadditionalparticipatinginthird-partyincubatorsacceleratorsforenhancingcustomerorinvestinginafewstartupswillnotvalue,propositionsandoperations.beenough.Insurerswhoengagewithinnovationonlyviaself-containedButstartupsarenottheonlyanswertoprogrammesruntheriskofstiflingtheinnovationconundrum.Manyinsurersinnovativebehaviourinotherpartsofarealreadyleveragingdesignthinkingtheirorganisations.Havingtherightandothertechniquestosolvebusinesscorporateculture,innovationstrategyandproblemsin-house.Othersareholdingfundingareallimportant.Butthemosthackathonsordesignsprintstogenerateinnovativeinsurerswillalsomakedatainnovativeproductideasorimprovedstrategycentraltotheirchangeagendascustomerexperiences.Thereisawhole–data-relatedinnovationwilloftenhaveatoolkitavailabletoinsurerslookingforwidespread,catalyticeffectoninnovationwaystodriveinnovationwithintheirowninotherpartsofthebusiness.industryor,forthebravestorganisations,tocreatedisruptionelsewhere.Inalltheserespects,traditionalinsurerscanlearnmuchfromthewayInsurTechsTofullybenefitfromtheinnovationoperate,andfrompartneringwiththem.toolsandoptionsavailabletothem,Indeed,theimportanceofpartneringmanyinsurersfindithelpfultofocuscannotbeoverstated.Itisrelativelyeasyonthreetypesofactivity,whichactastoacquireorinvestinastartup,buttrulycomplimentarypillars.Thefirstinvolvesintegratingthatstartup’srealvalue–itsbecoming(andremaining)awareoftechnology,peopleandphilosophy–intoindustryinnovationsandmarketshifts–anexistingbusinesscanbechallenging.participationinthird-partyincubatorsisYetthiswillbethekeytounlockingthefullagoodwayofkick-startingthisprocess.potentialofthepartnership.Thesecondinvolvesrunninginternalinnovationinitiatives,suchashackathonsPartnershipsbetweeninsurers,startupsandsprints,togeneratespecificideasandandothercollaboratorsshouldbebuiltonoutputs.Andthethirdinvolvesensuringawin-winbasis.Andidentifyingadditionalthefirm’soverallinnovationstrategyand‘wins’greatlyimprovesthechancesofapproachiswell-developedandwidelysuccess.Thestartupmightgreatlybenefitsupported–withoutthis,ideasandfromaccesstoasubsetoftheinsurer’soutputsfromspecificinitiativeswillnevercustomerbasetotestoutitspropositionsbetakenforwardintoproduction.10 InsurTechisnotasilverbullet–ACCENTUREACCENTUREtherealchallengeforinsurersistobecomemoreinnovativeintheireverydaybusiness.Thismeansnotholdingnewtechnologiesatarm’slength,KEYandnottakingapiecemealapproachtoinnovation.TAKEInsurersneedtoembraceinnovationandcapabilities,forinstance.Equally,aspartofbusinessasusual.Simplytheinsurerwillmostlikelyfindadditionalparticipatinginthird-partyincubatorsacceleratorsforenhancingcustomerorinvestinginafewstartupswillnotvalue,propositionsandoperations.AWAYSbeenough.Insurerswhoengagewithinnovationonlyviaself-containedButstartupsarenottheonlyanswertoprogrammesruntheriskofstiflingtheinnovationconundrum.ManyinsurersinnovativebehaviourinotherpartsofarealreadyleveragingdesignthinkingFORFORtheirorganisations.Havingtherightandothertechniquestosolvebusinesscorporateculture,innovationstrategyandproblemsin-house.OthersareholdingINSURINSURfundingareallimportant.Butthemosthackathonsordesignsprintstogenerateinnovativeinsurerswillalsomakedatainnovativeproductideasorimprovedstrategycentraltotheirchangeagendascustomerexperiences.ThereisawholeTECHS…ERS…–data-relatedinnovationwilloftenhaveatoolkitavailabletoinsurerslookingforwidespread,catalyticeffectoninnovationwaystodriveinnovationwithintheirown•Understandthemarketandthe•Developyouroverallinnovationinotherpartsofthebusiness.industryor,forthebravestorganisations,challengeyouaresolvingfor.agenda–andthendeterminetocreatedisruptionelsewhere.whereInsurTechsitswithinit.Inalltheserespects,traditionalinsurers•EnsurethatyourpropositioncanlearnmuchfromthewayInsurTechsTofullybenefitfromtheinnovationisclear,conciseandrelatedto•Embraceinnovationaspartofoperate,andfrompartneringwiththem.toolsandoptionsavailabletothem,thatspecificchallengeoryoureverydaybusiness,acrossIndeed,theimportanceofpartneringmanyinsurersfindithelpfultofocusbusinessproblem.yourwholeorganisation.cannotbeoverstated.Itisrelativelyeasyonthreetypesofactivity,whichactastoacquireorinvestinastartup,buttrulycomplimentarypillars.Thefirstinvolves•Considerthebroaderinsurance•Promotetherightcorporateintegratingthatstartup’srealvalue–itsbecoming(andremaining)awareofindustry–notjustthepersonalculturetofosterinnovation,technology,peopleandphilosophy–intoindustryinnovationsandmarketshifts–non-lifespace.drivenfromtheC-suitedown,anexistingbusinesscanbechallenging.participationinthird-partyincubatorsiswithincentiveslinkedtonewYetthiswillbethekeytounlockingthefullagoodwayofkick-startingthisprocess.•Bepatient,andsupportrolesandcapabilities.potentialofthepartnership.Thesecondinvolvesrunninginternaltraditionalinsurersontheirinnovationinitiatives,suchashackathonsculturalandtechnological•DrawinspirationandlearningPartnershipsbetweeninsurers,startupsandsprints,togeneratespecificideasandjourneys.fromretailbanks’FinTechjourneys,andothercollaboratorsshouldbebuiltonoutputs.Andthethirdinvolvesensuringandfromtheirabilitytolookbeyondawin-winbasis.Andidentifyingadditionalthefirm’soverallinnovationstrategyand•DeterminewherethesolutiontheFSspace.‘wins’greatlyimprovesthechancesofapproachiswell-developedandwidelyandbusinessboundariessit.success.Thestartupmightgreatlybenefitsupported–withoutthis,ideasand•Donotfeelthreatenedbystartupsfromaccesstoasubsetoftheinsurer’soutputsfromspecificinitiativeswillnever•Adoptaflexiblepartneringwhoseculturesorworkingpracticescustomerbasetotestoutitspropositionsbetakenforwardintoproduction.approach,andconsiderformingseemradicallydifferenttoyourown.broaderecosystems.1011 ROYJUBRAJCONTACTDigital&InnovationLead,UK&IrelandFinancialServicesTHEkadesh.r.jubraj@accenture.comAUTHORSSTEVENWATSONInsurTechLead,UKInsurancesteven.watson@accenture.comSIMONTOTTMANInsuranceResearchLead,UK&Irelands.tottman@accenture.comABOUTACCENTUREAccentureisaleadingglobalprofessionalservicescompany,providingabroadrangeofservicesandsolutionsinstrategy,consulting,digital,technologyandoperations.Combiningunmatchedexperienceandspecialisedskillsacrossmorethan40industriesandallbusinessfunctions—underpinnedbytheworld’slargestdeliverynetwork—Accentureworksattheintersectionofbusinessandtechnologytohelpclientsimprovetheirperformanceandcreatesustainablevaluefortheirstakeholders.Withmorethan375,000peopleservingclientsinmorethan120countries,Accenturedrivesinnovationtoimprovethewaytheworldworksandlives.Visitusatwww.accenture.com.ACCENTURE’SINSURTECHPROGRAMMEAspartofourFinTechInnovationLabinLondon,AccenturehasbeenworkingcloselywithInsurTechstartupsandinsurersoverthepastfivemonths.ItisthefirstyearthatInsurTechhasbeenallocateditsownspecificworkstreamwithintheglobalAccentureprogramme.OversixtystartupsappliedtobepartoftheInsurTechworkstream(whichalsoinvolvesthirteeninsurers),andtheprogrammeeventuallyselectedfivestartupsfocusingonSocialData,ArtificialIntelligence,Distribution,EnhancedTelematics,andRiskProfiling.Duringtheprogramme,Accenturesupportedcollaborationbetweenthestartupsandtheinsurers,gaininguniqueinsightintothechallenges,learningsandopportunitiesInsurTechbringstotheindustry.Thestartupsthemselvesdevelopedtheirbusinesspropositionstoensuretheyweremarket-readyandaddressingaspecificpartoftheinsurancevaluechain.Theinsurancepartnersgainedvaluableinsightsintothenewtechnologiescomingintothemarket,andwerealsoabletodevelopandenhancetheirowninnovationagendas.Applicationforthe2017-18programmewillopeninSeptember2017.Formoredetailsvisitwww.fintechinnovationlablondon.co.ukorfollowusonTwitter@FinTechLabLDN.Copyright©2017AccentureMADEBYACCENTURERESEARCHAllrightsreserved.AccentureResearchisaglobalteamofindustry,geographic,economicanddigitaltechnologiesanalystswhoprovidedata-driveninsightsthatidentifydisruptors,opportunitiesandrisksforAccentureanditsclients.Theyuseinnovativebusinessresearchtechniquessuchaseconomicvaluemodeling,analytics,crowdsourcing,expertnetworks,surveys,Accenture,itslogo,andHighPerformancedata-visualizationandresearchwithacademicandbusinesspartnerstocreateprovocativepointsofviewspublishedDeliveredaretrademarksofAccenture.byAccentureeveryyear.TheresearchinthisstudywasledbyAccentureResearch.InsuranceResearchLead,UK&Ireland