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Insurance: Post COVID-19 Digital Partnership Models

This article was first published on July 14, 2020.

Editor's note: Oliver Wyman is monitoring the COVID-19 events in real time, and we have compiled resources to help our clients and the industries they serve. Please continue to monitor the Responding To Coronavirus Hub for updates.

With coronavirus (COVID-19), voice, data and digital platforms have seen increased usage as customers rush towards them to manage their needs. Insurers have a unique opportunity to capitalize on this shift by developing new business models with platform providers, expanding their reach and delivering value to the platform customer.

Amongst partner candidates for insurers (see Exhibit 1), telcos have always been a valuable option due to their large captive user base, access to customer data lakes, analytics capabilities, and digital assets with an ability to integrate customer journeys with insurance offers. From the perspective of telcos, a partnership with insurance players helps create a healthy revenue stream and improve customer outcomes with insurance offerings.

EXHIBIT 1: COMPARISON OF POTENTIAL PARTNERSHIP PLATFORMS

1. Includes aspects like brand loyalty, and switching behaviour
2. Includes only smartphone based payments providers
Source: Oliver Wyman analysis

With both insurers and telcos under immense pressure to reinvent their digital businesses, we envisage these businesses will come together with new partnership models. The recipe for a successful insurer-telco partnership involves two key ingredients: product propositions, and operating model.

Joint product propositions can be offered based on the customer’s digital journeys with the telco, as well as trigger-based targeting of specific customer segments using their behavior on the telcos platform (see Exhibit 2).

EXHIBIT 2: BROAD PROPOSITIONS WITHIN THE TELCO PARTNERSHIP PLATFORM

Source: Oliver Wyman analysis

In terms of operating model, telcos should consider being a part of a fully integrated ‘true partnership’ model with insurers. Careful consideration is required in setting up a joint teaming model and the commercial structure of a new partnership.

Insurers will also need to assess and upgrade capabilities across the entire value chain in order to enable the digital business model and leverage partnership benefits to full potential.

A partnership will require both parties to develop new capabilities and integrate (see Exhibit 3), which is determined by the operating model.

EXHIBIT 3: CAPABILITY INTEGRATION ARCHITECTURE

Source: Oliver Wyman analysis

Insurance: Post COVID-19 Digital Partnership Models


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