Menu

Reinsurance News

Digital ecosystems create opportunities for insurer’s expansion in mobility market

1st February 2018 - Author: Staff Writer

McKinsey & Company highlighted opportunities for insurers to secure their mobility market position through expanding their digital ecosystems at a time when increasing numbers of stakeholders are using the growing digital economy to disrupt traditional players, in a report on digital ecosystems and platforms in insurance.

With a passive and limited relationship with customers, re/insurers are particularly vulnerable to disruptors and need to adapt and reinvigorate their traditional business model to consider partnerships with players both within and outside the industry.

Analysts explained; “a look at today’s connected-car ecosystem illustrates the benefits and risks that lie ahead for auto insurers. Innovation has caused significant disruption, resulting in the emergence of four natural stakeholders in the ecosystem: original equipment manufacturers (OEMs), high-tech players, insurers, and telecom providers.

“As mobility evolves, first movers will have the opportunity to transition from stakeholders to orchestrators in three key areas: customer relationships, network and service management, and analytics.”

McKinsey & Company advised insurers to build on their foundation in the mobility sector by adding capabilities such as mobile sensors, analytical tools, and customer interfaces.

Within the personal-mobility ecosystem, insurers could expand into vehicle purchase and maintenance management, ride-sharing, carpooling, traffic management, vehicle connectivity, and parking.

Services such as telematics are a way of developing meaningful customer relationships and thus helping to stave off the stiff competition.

McKinsey said; “as more OEMs conceptualize line-fitted telematics devices and ride-sharing providers such as Uber grow ever stronger in network management, it is incumbent on insurers to move from risk aggregation to risk prevention.”

“Mobility is in the midst of a significant tech disruption, with Lyft and Uber leading the charge in on-demand services, and giants such as BMW entering the fray with car-sharing club DriveNow. In addition, Apple, Google’s Waymo, and Tesla are competing to automate cars one function at a time.

“Most of the traditional automotive players seem to be at a disadvantage in the mobility industry and face a pressing need to reimagine their roles. Some are starting to see opportunities to move toward an ecosystem mind-set. For instance, Toyota has invested $1 billion in the Toyota Research Institute, which seeks to use artificial intelligence to address issues across the mobility ecosystem.”

Growing use of ecosystems and distribution platforms are contributing to a paradigm shift that is rewriting business as usual.

As the accelerating pace of change in re/insurance redefines customer expectations and boundaries, keeping up with the tech revolution will more than repay forward-thinking innovation with increased opportunities for high-tech players to assimilate new risks and widen their scope of customer engagement.

Recent Reinsurance News

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.