Accenture: Insurance GWP to reach US$7.5trn by 2025
To demonstrate insurance’s resiliency, the company projects a 23% increase in gross written premiums (GWP) - from $6.1trn in 2020 to $7.5trn in 2025. Furthermore, as by Swiss Re, APAC markets such as China will boost the industry’s global CAGR.
“While this is good news for the industry overall, growth is not linear, and won’t follow the same proportions we see in today’s current revenue pools. Gaining ground against existing and new competitors will require innovation and scenario planning,” it warned.
Innovation against complacency
The encouraging initial findings of the report could give insurers the idea that “staying the course” will perpetuate success. However, Accenture states, doing so will prove to be the antithesis of profitability and sustainable growth.
Similar to the UK government’s , innovation, both in a cultural and technological sense, is key. For an industry that has often erred on the side of caution and adopted a traditional stance to operations, this is a message that needs to be received:
“[I]nsurers can no longer rely on the familiar products, channels, and historic retention rates to drive profitability long-term. Rising costs, volatile markets, and increasing consumer demand for digital services show no sign of abating.”
Of the $1.4trn growth over the next five years, Accenture anticipates the following distribution:
- $200bn to originate from new product and service offerings
- $140bn from product innovation
- $140bn in shifting placement channels
Growing the insurance industry
Therefore, the tripartite strategy for insurance moving forwards should be focused on 1) new products, 2) services, and 3) new revenue streams.
Such a plan will be important not just to achieve growth but also to retain existing customers. An Accenture insurance consumer study found that 20% of consumers in mainland China intend to switch insurers in the next 12 months, a statistic that, if true, would significantly impact the region’s CAGR.
Insurers must also balance their appeal between generations: millennials are generally drawn to the digital experience offered by insurtechs, and neglecting to incorporate their preferences is to potentially alienate a key market.
“With traditional revenues slowly being replaced by innovation-led revenues that reflect the changing demands of our changing world, insurers need to move now to shift their business. The ‘future’ of revenues will become the present faster than most would expect,” concludes the report.
Read the full Accenture report here
Startup spotlight: SIMON adds Nationwide to its platform
Headquartered in New York, SIMON has a singular goal: transforming the digital experience for financial advisors and unlocking greater levels of service for their clients. It achieves this through:
- A comprehensive platform featuring a full suite of digital tools
- On-demand education
- An “intuitive” marketplace
- Real-time analytics
- Lifecycle management
The company’s fusion of cutting-edge tech with leading expertise is resulting in a new industry standard, one that is simplified, codified, and consolidated within a single ecosystem.
Creating value for financial advisors
At the time of writing, SIMON works with over 85,000 finance professionals who collectively manage more than US$3tn in assets.
The startup’s solutions include:
- Spectrum: A multi-dimensional framework that quantifies the risk profile of investments using five metrics - protection, upside, liquidity, simplicity, and history
- An investment platform: Featuring risk management tools, over 90 educational videos, inclusive product training, a compliance tracker, and more.
- Analysis tools
Furthermore, SIMON’s quality as an organisation is attested by both its awards (such as being listed among the NYC Annual Awards’ ‘Best Places to Work’ category) and the status of its investors. So far, these include Barclays, JPMorgan, Prudential, Goldman Sachs, HSBC, and others.
Another high-profile name has now been added to SIMON’s list of associations: Nationwide. The Fortune 100 US insurance firm has been added as a carrier to SIMON’s marketplace. Nationwide, which is almost a century old, is an ideal fit for an insurtech focused on delivering broad solutions and expertise in a rapidly evolving sector.
Protecting peoples’ financial futures
Regarding this latest partnership, Scott Beshany, Chief Distribution Officer at SIMON, said, “Nationwide has an incredible history of innovation and advocacy and we couldn’t be more thrilled to collaborate with their team and make their products available in our Marketplace.
“Both firms are strongly aligned in the value we seek to create for financial professionals. SIMON’s dedication to delivering intuitive technology that builds simplicity and transparency around annuity offerings supports Nationwide in its mission of helping people prepare for and protect their financial future.”
Craig Hawley, Head of Annuity Distribution at Nationwide, expressed similarly positive sentiments about the collaboration:
“Nationwide has a decades-long track record of incorporating smart technology into the financial professional’s day-to-day workflow. This is another big step forward in that effort, with a proven, innovative partner at our side.
“With SIMON’s platform, financial professionals can seamlessly integrate a range of annuities into their holistic planning process, creating greater efficiencies for their practice and a more comprehensive wealth management experience for their clients.”
Images sourced from respective companies