NEW YORK & LONDON & HONG KONG–(BUSINESS WIRE)–Rising demand for digital insurance coverage premiums and their on-line distribution is predicted to displace US$280 billion of present insurance coverage revenues by 2025, difficult present buyer retention ranges, in accordance to a brand new report from Accenture (NYSE: ACN).
In the report, “Insurance Revenue Landscape 2025: Innovate for Resilience,” Accenture analyzes how the insurance coverage trade’s revenues shall be affected by new buyer, demographic and know-how tendencies.
The analysis exhibits that, regardless of the worldwide recession of 2020, the worldwide insurance coverage trade will develop from US$6.1 trillion in early 2020 to US$7.5 trillion by the tip of 2025—a compound annual progress charge of 3.5%. This consists of $800 billion in U.S.-centric healthcare payer premiums, which haven’t historically been counted as half of the insurance coverage sector, however have grow to be materials due to international demand for convergence of digital well being services, comparable to wellness choices.
As prospects renew their insurance policies with data-driven choices, US$140 billion of present insurance coverage revenues might probably shift from conventional to technology-enabled insurance coverage merchandise, together with switching to behavior-based insurance coverage for related automobiles and sensible houses. Concurrently, one other US$140 billion of present revenues in conventional insurance coverage distribution might be displaced by insurers providing digital distribution experiences, as prospects buy insurance coverage on digital channels and third-party platforms.
“The recent acceleration to digital channels threatens the renewal of some traditional premiums and alters the future revenue landscape for insurers,” stated Kenneth Saldanha, who leads Accenture’s Insurance trade group globally. “While the industry will remain resilient and grow, the pace of technology and societal change is coming faster than expected. Insurers that reimagine how they run their business and engage their customers with digital experiences will be positioned for success. Insurers who move from traditional to technology-led offerings that are better integrated with customer data are better positioned to lead; others risk losing revenues to digital-first competitors and new entrants.”
The report finds that insurers will compete for new income progress in buyer wellness, significantly as they make new partnerships in a digital ecosystem to enhance buyer well being and private funds. The report estimates that the convergence of the life insurance coverage, well being and wealth industries will generate US$120 billion in new revenues — comprising US$60 billion from sensible well being merchandise; US$30 billion from services for the getting old inhabitants; and US$30 billion from direct life and wealth administration merchandise.
Insurers may also compete for new revenues to cowl rising and newly growing dangers. As insurers cowl publicity to environmental catastrophes, dangers associated to local weather change are anticipated to make up US$50 billion of new insurance coverage revenues. As cyber threats quickly rise, protection and risk-mitigation companies associated to cyber threats are anticipated to generate one other US$25 billion. Insurers that enhance pre- and post-incident dealing with with digital applied sciences, like synthetic intelligence and analytics, will allow extra refined danger modelling and incident response.
Ravi Malhotra, who leads Accenture Strategy’s Insurance trade group in North America, stated, “A fast-changing world, filled with environmental risks, cyber threats and more people feeling physically and financially vulnerable, is causing insurers to reimagine their role in the economy and position themselves as risk preventors, not only compensators. In health, consumers are increasingly comfortable sharing data for products that help them maintain healthy habits, giving insurers an opportunity to provide a more holistic risk-management service that changes their role from financial safety net to an active partner in preventing and mitigating injury and loss. Working with reinsurers can also help to cover climate change risks – especially in emerging markets where there is currently a massive gap in coverage.”
Read the complete report right here.
Methodology
The analysis examined insurance coverage trade exercise towards broader shifts in international markets, analyzing each buyer calls for and the way insurers are responding from the availability facet. The evaluation analyzed the influence of greater than 70 tendencies, together with demographic, financial and environmental change, and the dynamics of international income swimming pools. Accenture developed a mannequin to analyze buyer calls for throughout the next areas – sensible merchandise, sharing financial system and different rising dangers, together with ageing inhabitants, local weather, cyber, disaster administration and autonomous automobiles.
About Accenture
Accenture is a worldwide skilled companies firm with main capabilities in digital, cloud and safety. Combining unmatched expertise and specialised expertise throughout greater than 40 industries, we provide Strategy and Consulting, Interactive, Technology and Operations companies—all powered by the world’s largest community of Advanced Technology and Intelligent Operations facilities. Our 537,000 folks ship on the promise of know-how and human ingenuity daily, serving purchasers in additional than 120 nations. We embrace the facility of change to create worth and shared success for our purchasers, folks, shareholders, companions and communities. Visit us at www.accenture.com.
Accenture’s Insurance follow helps P&C insurers, life carriers and reinsurers to redefine their enterprise and working fashions, improve the digital expertise for prospects, and place themselves for progress in a digital financial system. To be taught extra, go to: www.accenture.com/us-en/industries/insurance-index.
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