SMA Report: New Challenges, Competitors Face Insurers
Staff Writer | September 03, 2014
Strategy Meets Action released a new research report, The Shifting Competitive Landscape: A New Breed of Industry Challengers, which describes a new breed of industry challengers coming from technology and Silicon Valley companies that are testing insurers' historical views of competitors.
There have been numerous articles and blogs regarding the potential of companies like Google, Apple, Amazon, eBay, and other technology companies entering the insurance space, fueling speculation, concern, and for some, even fear. Each of these companies and others like them have a large part in leading the digital revolution and redefining everything from business models to customer engagement, revenue models, partnerships, customer empowerment, the use of data and analytics, and more. Centuries-old industries and the companies within them are feeling the pressure to reimagine themselves, and insurance is one of them.
"New challengers may not compete directly by offering and underwriting insurance. These challengers are competing in new ways to capture customer relationship, loyalty, pocketbook, and much more through innovative offerings, engagement, and business models," says Denise Garth, SMA Partner. "These challengers have key business attributes that illustrate the distinctions between themselves and insurers—business attributes that are fortifying the challengers' rapid growth and influence. Furthermore, each of these challengers is rapidly developing new and innovative capabilities that continually reshape, transform, and enhance customer engagement and experience."
The report highlights and discusses the following:
- Assessments of ten of these challengers based on influence and breadth of users and business capabilities.
- Identification of key attributes of these challengers and the implications for insurance, particularly since a growing number of customers are willing to consider buying insurance products from organizations outside insurance.
- Examples of the convergence of industries that are further fueling the disruption of customer engagement and experience.
- The stark contrasts in strategic vision and focus between the challengers and insurers, reflecting the shifts and challenges of the new digital economy.
- Tactics these challengers are likely to use to challenge insurance, leveraging their capabilities, customer relationships, reach, and influence to establish a new generation of program business.
- Key implications and questions to help insurers to rethink their strategic vision and business models.
- Recommendations and actions that can help insurers broaden their views of emerging challengers, with an outside-in view to bring strategic value to insurers.
The report suggests many insurers are accustomed to asking, "What products and services do we manufacture and what channels do we use to sell them in order to grow the company profitably?" But the insurance leaders of tomorrow should be asking, "How can we connect, educate, inform, and enhance our customer's lives or businesses through innovative offerings that provide meaningful value in helping to eliminate, reduce, or manage risk in a world of changing risk?" according to Garth.
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