How big will the impact of digital insurance services be on traditional premiums?
According to the report, the global insurance industry will grow from US $ 6.1 trillion at the start of 2020 to US $ 7.5 trillion by the end of 2025 – a compound annual growth rate of 3.5 %. This includes US $ 800 billion in US-centric healthcare premiums, which are not traditionally accounted for in the insurance industry, but which have become significant due to global demand for product convergence and digital health services, Accenture said.
As customers renew their policies with more data-driven offerings, US $ 140 billion in current insurance revenue could shift from traditional insurance products to technology insurance products, including insurance-based insurance. behavior for vehicles and smart homes. Another $ 140 billion in current revenue for traditional insurance distribution could be displaced by insurers offering digital distribution, as customers purchase insurance through digital channels and third-party platforms.
“The recent acceleration of digital channels threatens the renewal of some traditional premiums and changes the future revenue landscape for insurers,” said Kenneth Saldanha, group leader of Accenture’s global insurance industry. . “While the industry will remain resilient and grow, the pace of technological and societal change is faster than expected. Insurers who are reinventing the way they run their businesses and engage their clients with digital experiences will be in a good position to be successful. Insurers who move from traditional offerings to technology-driven offerings that are better integrated with customer data are in a better position to lead; others risk losing revenue to competitors and new entrants who favor digital technology. “
The report found that insurers will be competing for further revenue growth in the area of customer well-being, especially as they forge new partnerships in a digital ecosystem to improve customer health and finances. Accenture has estimated that the convergence of the life insurance, healthcare and wealth sectors will generate $ 120 billion in new revenue – $ 60 billion in smart health products, $ 30 billion in health products and services. aging population and $ 30 billion of direct living. and wealth management products.
The report predicts that insurers will also compete for new revenue to cover emerging and new risks. Climate change risks are expected to add $ 50 billion in new insurance revenue, and cyber threat risk coverage and mitigation services are expected to generate an additional $ 25 billion.
“A rapidly changing world, filled with environmental risks, cyberthreats and more and more people feeling physically and financially vulnerable, is leading insurers to rethink their role in the economy and to position themselves as agents of risk prevention , not just compensators, ”said Ravi Malhotra, Accenture Strategy’s insurance industry group leader in North America. “In healthcare, consumers are increasingly comfortable sharing data for products that help them maintain healthy habits, which gives insurers the ability to provide a risk management service. more holistic approach that changes their role from a financial safety net to an active partner in the prevention and mitigation of injury and loss. Working with reinsurers can also help cover climate change risks, especially in emerging markets where there is currently a massive coverage gap. “