So Laura, how do you define an ecosystem?
To me, ecosystem means a network of vetted solutions from a variety of participating providers. So it's a marketplace. It's like shopping on Amazon and being able to find a solution that meets your specific needs with different supplier options provided. And the value of a successful ecosystem is greater than the combined value of each of the players on their own. So it's a collaborative result.
So why are ecosystems important for future insurance models?
Because insurers need to be able to innovate quickly to capitalize on these new insurance models by leveraging partner and insurtech ecosystems. Ecosystems already drive today's most compelling operating models. Usage-based insurance (UBI), for instance, including pay-as-you-drive auto coverage, is predicated by ecosystems, spanning telematics, mobility, automobile and smartphone manufacturers, and many others. And Toyota and Tesla and other manufacturers are teaming up with insurers to embed the purchase of UBI and other forms of coverage directly into the car buying process. So ecosystems make new forms of insurance like UBI, and an embedded insurance model possible.
It's not about whiz bang tech, it's about solving or addressing a valid business problem
So how do you get started building an ecosystem?
So I would recommend, first of all, to start with the business, asking them what their business priorities, challenges or opportunities are. Ecosystems address real life business opportunity, so start there. Number two, define your ecosystem and go-to-market strategy in advance: which areas of the lifecycle are you focusing on? And how do you plan to educate your team and customers on the partners you've selected? And number three, define your entry and your exit criteria before selecting participating providers. If a partner evolves into a competitor, then then it's really important to have guidelines in place for their exit.
And what's the best way to choose partners?
So I'm going to actually quote Accenture in their three S's: skill, scale and scope. So with regards to skill, select ecosystem partners that have capabilities that give you access to a wider range of skills, for example, personalization and digital experiences. Scale: bring on partners who have greater size and reach in areas where you need it, for example, data and cyber. And then third is scope: select partners that extend your insurance offering and introduce new services.
Could you share any secrets to success?
I can. And it's based upon my own experience, creating and launching our own insurtech incubator. So first of all, you want to start with the business opportunity. It's not about whiz bang tech, it's about solving or addressing a valid business problem. Second, keep your ecosystem fresh: monitor and refresh your partners to ensure their value propositions are still relevant to your customers, and also to the insurance lifecycle. And third, it's about education: educate your stakeholders on your ecosystem and create excitement for the value propositions within it.
