A New Breed of Industry Challengers – SMA Research

Article Synopsis :

Internet, social media and mobile technologies have proved to be the big disrupters for most sectors and there are many lessons for insurers to learn from this in order to avoid becoming irrelevant in a world that is fast becoming dominated by tech savvy, customer focused and extremely agile companies and brands.

A new breed of challengers may pose a threat to traditional insurers 

In the research report “The Shifting Competitive Landscape – A New Breed of Industry Challengers”, Denise Garth from SMA highlights that insurers are being blindsided by new challengers and competitors from outside the industry. Although these challengers are not competing directly by offering and underwriting insurance – they are competing in new ways to capture customer relationship, loyalty, pocketbook, and much more through innovative offerings, engagement, and business models. She highlights a statistic from a recent Accenture report which found that “67% of insurance customers would consider purchasing insurance products from other organisations other than insurers”.

In the report, Denise lists the key business attributes that differentiate these new technology challenger companies from traditional insurers:

• Customer Engagement
• Customer Demographics
• Digital Businesses
• Innovation Leaders
• Data Masters
• Capital-Rich

She provides an example of a connected home offering where the solution has a wide array of offerings from home monitoring, home risk prevention, home maintenance and potentially home insurance.  The insurance policy would be only a piece of the bigger experience and relationship.

Denise goes on to  contrast the focus and strategic vision of these new challengers to the traditional insurers that reflect the shifts and challenges of the new digital economy for insurers:

• Customer vs. Product
• External vs. Internal
• Customer power vs. Company control
• Connecting people to an ecosystem vs. Connecting people to the company
• Pulling and engaging vs. Pushing and informing
• Selling an outcome vs. Selling a product
• Creating an experience vs. Processing a transaction

In the SMA call to action section, Denise advises insurers and solution providers to broaden their views of emerging challengers with an outside-in view that has the potential to disrupt, redefine, and transform the industry and highlights the key areas to watch, assess, and engage to create value:

• Company vision, strategy and focus
• Customer engagement model
• Ecosystems and partnerships
• Customer data and analytics mastery
• Innovation leadership
• Capital alignment

She concludes by stating “in today’s hyper-connected, technology-driven digital world, those who experiment, innovate, collaborate, co-create, and challenge the status quo will gain competitive advantage compared to those who hold on to their legacies and traditions”.

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