Innovation-led revenues are poised to augment traditional revenues in many product lines. According to Accenture research, Innovate for resilience, and new insurance revenue, the global insurance industry will grow by $1.4 trillion between 2020 and 2025. Included in that growth, we anticipate almost 5% of global premiums—approximately $280 billion—to be impacted by innovations in products ($140 billion) and shifts toward digital third-party platforms ($140 billion).
Start with unmet customer needs
For insurers wondering where to start when it comes to developing innovative new products, I recommend beginning by identifying your customers’ unmet needs. Through research, data analysis, and design thinking workshops, look beyond what you’re doing today to see solutions that could be meaningful, relevant, and valuable to your customers tomorrow.
For instance, our 2021 Accenture Global Insurance Consumer Study found that consumers are interested in:
- Personalized, usage-and behavior-based insurance such as pay-as-you-drive automotive insurance
- Life Insurance premiums that reward customers for healthy lifestyle choices
- Cyber insurance where premiums are tied to using the latest virus protection software, password managers, and other tools
Source: Technology Trends 2021 | Tech Vision | Accenture
Also, see my previous post in which I shared four areas of innovation to consider.
Innovative new products targeting specific needs
Recent product offerings that are designed to meet very different consumer needs include:
Three by Berkshire Hathaway. Three offers comprehensive insurance for small businesses. The solution is built on three pillars—simple (a straightforward policy in plain English), comprehensive (one inclusive policy to protect the whole business) and cost-effective (designed to cost 20% less than comparable coverage). A single policy can cover business liability, business interruption, cyber attacks, worker’s compensation, business auto, and property and assets. For small business owners that qualify, this offering is a game-changer.
Toggle, a Farmers’ Company. Toggle offers customizable renters’ and auto insurance with rewards for each claim-free year and matched to millennial priorities. Customers can select from a range of options including coverage for expensive items like cameras, phones and computers, coverage for side hustle businesses, identity protection, and pet and injury insurance. The company also handles the switch from another insurer to make things as easy as possible for new customers. Accenture worked with Toggle to analyze millennial attitudes toward renting and insurance—research that revealed the new offering had to be accessible, fast and customizable, and the experience second to none.
Experiment, launch, and scale
According to Harvard Business School’s Clayton Christensen, 95% of all new products fail. We’ve found that successful products are the result of development strategies that put customer experience at the forefront and focus on leveraging data. Reducing the cost and time it takes to gain customer learnings is key to pulling ahead. This is in stark contrast to the slow and deliberate approach that historically risk-averse insurance companies have typically favored. This means building a data-led, rapid experimentation capability, perhaps even innovation hubs and incubators, that let you test a series of hypotheses and build prototypes without risking huge investments. My colleague, David Boycott, talks about how to escape from pilot purgatory.
Given that so many products fail, the launch and scale of new products are also critical. To do that you need to set key targets, use data-led marketing and create a rollout framework to scale them across new channels. If you’re interested in learning more about this, see our Launch your next big opportunity page. Another option my colleague Jim Bramblet has talked about is to use intelligent digital twins.
In my next post, I’ll look at how a marketing transformation can help you drive growth.
Get the latest insurance industry insights, news, and research delivered straight to your inbox.