Amid the economic turmoil of 2020, we’ve heard a lot about pricing adjustments on existing insurance products and about product innovations aimed at addressing new areas of risk.

As the COVID-19 recession tests the resilience of their balance sheets and catastrophic event claims increase, insurers are pulling their business levers in response. But, are those levers for which they are reaching the right ones?

In our latest report, Where’s the Payback on Digital Innovation in Insurance, Jean-Francois Gasc and I examine five categories of digital innovation to determine which among them provide the best return on investment. We found that leading insurers were more likely to invest in customer-facing digital innovations—especially those in distribution. There was less correlation between market leadership and innovation in product or other internally-facing categories.

Our analyses were based on data from Accenture’s proprietary digital innovation database. It captures public innovation announcements from the top 30 insurance players across all major markets. It’s important to note that these are English language sources that are broadly communicated across the market and seen by analysts and investors.

An insurance company is only going to be known for what it communicates. If there’s any question about whether messaging matters—it does. To make a real impact, it matters what you say to the market about your innovations. This is especially true during a recession when investors are more selective and focused on competitive advantage.

Beyond innovation theater

Insurers need to think about the areas of the business where they can make a legitimate impact on performance. And, they need to talk about their innovations in a way that gets past clichés and buzz words.

The usual talk about where to spend time and dollars doesn’t communicate innovation value. Instead, put the emphasis on ways innovation will attract and retain customers, and create a messaging strategy that shows investors your business is a safe place to put their money.

The medium is (still) the message

Public announcements about innovations can be a powerful way for an insurer to attract the attention of analysts and investors, but it’s not the only way. A few are getting what they need through an ad strategy.

Progressive, for example, doesn’t generally make public announcements about their innovations, but they don’t need to. Their well-advertised price comparison model was a powerful value proposition for consumers. Brand value and an ad budget that has more than doubled since 2016 speaks volumes to analysts and investors.

Messaging is a survival skill

While ad budgets measured in the billions would be cost-prohibitive for most insures, communicating business value in the market is no longer optional. Making customer-facing innovation investments and communicating those to the market is important in helping attract and retain capital—and this is a critical time to keep that in mind.

The harsh reality is that insurers need substantial capital reserves in order to be well-rated and underwrite the new risks their customers are now facing. Talking about what you do and the value you bring to the customer will enable you to continue doing it and help future-proof your business.

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Disclaimer: This document is intended for general informational purposes only and does not take into account the reader’s specific circumstances, and may not reflect the most current developments. Accenture disclaims, to the fullest extent permitted by applicable law, any and all liability for the accuracy and completeness of the information in this presentation and for any acts or omissions made based on such information. Accenture does not provide legal, regulatory, audit, or tax advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed professionals.



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