NEW YORK & LONDON–(BUSINESS WIRE)–Insurers are accelerating their plans to become more digital, driven by
increased adoption of Internet of Things technologies (IoT), data and
analytics tools and digital-first distribution models, according to an
Accenture (NYSE:ACN) report based on a survey of more than 400 insurers
globally.

According to the Accenture report, titled “Reimagining
insurance distribution: Insurers accelerate the shift to a radically
different distribution model,”
nearly half (45 percent) of insurers
believe that connected devices will be a driver of revenue growth in the
next three years. While much of the early adoption was in vehicle
telematics, there has been a significant increase in other IoT related
products over the past year. Just last year, most carriers said they
were not interested in or had no concrete plans to engage IoT connected
insurance tools, and only a minority had any IoT plans related to
home/buildings (cited 14 percent of respondents), health/fitness (10
percent) and other wearables (four percent). In this year’s study, this
has more than tripled as nearly four in ten insurers surveyed said they
have piloted or launched a connected home/buildings offering (cited by
39 percent of respondents), a health/fitness offering (39 percent), as
well as other wearables such as smart watches (37 percent).

Today, introducing products and services based on IoT technologies is
among the top investment priorities for insurers, with another being the
improvement of data and analytics capabilities. Nearly half of carriers
already launched or are piloting projects using open data and big data
analytics tools, and 58 percent said it is a high priority to use
customer analytics at the point of sale.

“Insurers are using customer data obtained from IoT connected devices
and applying analytics to make insight-driven decisions on how to better
engage with customers and offer more relevant products and services
aligned with their needs,” said Erik Sandquist, managing director for
Accenture Distribution and Marketing Services in North America. “IoT
technologies provide an abundance of data on customer behaviors and
preferences. Carriers that analyze and use these new sources of customer
data have a significant advantage over the competition, and will be best
placed to offer ‘living services’ – which allow companies to personalize
the customer experience and better respond to the evolving customer
needs and desires as they develop in real time.”

Survey respondents said using connected devices to create more
personalized insurance coverage for customers is of top importance for
driving revenue growth in the next three years. Carriers are embracing a
customer-centric approach to create needs-based services – more than
half (59 percent) expressed the need to move to a customer-centric model
urgently in order to remain competitive in the future. Nearly two-thirds
(63 percent) said that moving toward needs-based selling is a high
priority, and advanced analytics will be an enabler for needs-based
selling.

Shifting to a Digital-First Distribution Model

More than half (52 percent) of insurers said they expect to have a
wholly digital sales process within the next three years – only one in
four have this in place today – while only about one in five said they
have no plans to implement a wholly digital sales process. Today, 32
percent of property and casualty personal-line insurance quotes and
advice are provided completely through digital channels – the figure is
27 percent for life insurance. Both are expected to increase by
approximately 10 percentage points in the next three years. This trend
also extends to small commercial insurers, which expect 38 percent of
quotes to be delivered digitally and almost one quarter (24 percent) of
sales processes to be fully digitized from end to end, in the next three
years. Nearly half (46 percent) of life insurers said they always assign
a customer to an agent, even for online service purchases.

“Insurance companies are accelerating the shift to a digital-enabled
omnichannel distribution model and they are taking a hard look at how
best to use their agents and determine which interactions should take
place online,” said Jean-Francois Gasc, managing director, Accenture
Strategy. “Through our research, we have identified a subset of insurers
that are driving and accelerating the pace of change by harnessing the
latest technologies to transform the customer experience and secure
lasting ties with their customers through digital products and a
seamless omnichannel sales experience.”

As carriers shift more transactions to their digital channels, they are
also rethinking how they will involve agents moving forward. Today,
nearly two-thirds (63 percent) of carriers are more selective involving
agents only in the stages of the sales process where they add the most
value, including increasing sales of more profitable products. As a
result, 79 percent of insurers are redesigning their remuneration model
or discussing how to create a new model to fit their new omnichannel
distribution approach, as well as refocusing recruiting priorities based
on the ability to cross-sell (50 percent), advisory skills around
complex products (48 percent) and ability to build rapport with
customers (48 percent).

Methodology

Accenture Research surveyed 414 senior insurance executives across
Europe, the Americas and Asia Pacific to determine how they are
transforming their distribution models to increase customer engagement
and meet customer expectations. The surveys, which were conducted
online, took place between June and September 2015. Respondents were
mostly C-level executives and directors responsible for sales,
distribution and marketing and digital strategy at personal lines, small
commercial lines, life and multi-line insurance companies with at least
US$1 billion in annual premium volumes.

About Accenture

Accenture is a leading global professional services company, providing a
broad range of services and solutions in strategy, consulting, digital,
technology and operations. Combining unmatched experience and
specialized skills across more than 40 industries and all business
functions – underpinned by the world’s largest delivery network –
Accenture works at the intersection of business and technology to help
clients improve their performance and create sustainable value for their
stakeholders. With more than 358,000 people serving clients in more than
120 countries, Accenture drives innovation to improve the way the world
works and lives. Visit us at www.accenture.com.