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Disrupt or be disrupted
Considering the overall impact and the stakes
for the industry, a few scenarios should be
considered:
• Direct, unmediated customer relationships may soon become the
rule, rather than the exception, as insurers gain direct access to this
objective and unfiltered data. Traditional distribution patterns will
be disrupted once agents and advisors are no longer controlling and
brokering the access to customer data, and as insurers cultivate and
fully integrate these newer technologies.
• Advanced intelligence about customers means it is possible for
insurers to know more definitively who their customers are, what
they do and think, and how they change over time. Such insights
will no longer be based mainly on insurers’ own data, but rather on
more diversified and timely data sets that combine vast historical
information with real-time streams. This collision of data will give
insurers the ability to model and take action much more precisely
and proactively than before.
• Such intelligence will enable rapid advancements toward truly
individualized relationships, as opposed to the generic segmenting
and rudimentary targeting of the past. Insurers can devise and
bundle products with much greater sophistication and precision.
Mass customization will lead to increased value for some customers
and less value for others. “Downselling” may become as common
as upselling. With features, pricing and access tailored for individual
customers, insurers will be able to optimize their customer base
for profitability and simultaneously manage risk and underwriting
functions more effectively.
• The days of selling “just insurance” may be numbered. Some
disruptors will be well positioned to promote healthier, more secure
and safer living through the use of sensor technology, rather than
just contracts protecting personal finances from ill fortune. The view
insurance as another product feature represents a tectonic shift in
the way customers evaluate among service providers.
In summary, the survey results illustrate just how extensive,
profound and lasting the impact of sensor technologies will be to
the industry. There is also considerable debate about the possibility
of more focused risk pools potentially reducing profits of insurers
that do not understand them. Survival in a changing insurance
market will require a shift in mind set and capability, the adoption
of different business models and the integration of new data and
technologies.
This report includes key findings and analysis conducted by EY’s
insurance advisors and industry professionals, and outlines a path
forward based on the lessons learned by the success of leaders and
specific implications and actions that apply across the insurance
enterprise.
About the survey
In 2015, EY’s global insurance practice conducted a first-of-
its-kind survey to explore the implications of sensor-based
technology with C-level and other senior executives from a
range of industries.
Objective:
define the ways in which new data and emerging
technologies might shape business innovation, product and
pricing strategies, risk and regulatory management, customer
engagement and operational transformation.
Participants:
• Role: C-suite (75%) and VP or higher (97%)
• Companies: 1,782 organizations globally, including nearly
400 insurers
• Sectors: insurance, banking, electronics, retail, travel,
automotive, telecommunications
• Size (revenues):
•
<$1 billion: 20%
•
$1 billion - $10 billion: 35%
•
$10 billion - $50 billion: 30%
•
>$50 billion: 12%
•
No reply: 3%
• Countries represented: Argentina, Australia, Brazil, Canada,
Chile, China, Czech Republic, France, Germany, India, Italy,
Japan, Mexico, Netherlands, Poland, Russia, Singapore,
Spain, UK, US