Carriers keen to build platform business to forge close ties with partners, such as telcos and retailers, need to be clear about their roles in such alliances. They also must identify which parts of their value chain they’re going to integrate.
The rise of platform businesses presents insurers with an ideal opportunity to work closely with retail and telecommunications firms (telcos) to build new digital markets.
One of the key benefits of platform businesses for insurers is that other organizations operating in the same digital ecosystems can create value for them. Often such value is generated through completely new business models. Retailers and telcos, as I mentioned in my earlier blog posts, are well suited to such collaboration. By working with them within digital business platforms, insurers can find new ways to connect with customers, deliver innovative services that meet consumers’ changing needs and tap fresh revenue streams.
Carriers eager to capitalize on this opportunity need to move quickly to select the best partners. They must also determine the roles they wish to perform when they collaborate. Some insurers will want to build their own digital ecosystems that support a variety of co-operative platform businesses. Others would rather plug into another organization’s ecosystem. They might then participate in several platform businesses in many different ecosystems.
Furthermore, insurance providers need to identify the parts of their value chain that they can best integrate with platform-business allies. They might, for example, use their partner’s digital ecosystem to distribute their products and services but turn their own back-office facilities into a platform-based service that other organizations could access.
The development of new platform businesses is unlikely to be led by technology vendors. Instead, it will be insurers, retailers and telcos, and a broad range of other product and service providers, which will drive this transformation. Our 2015 Technology Vision survey found 77 percent of insurers are turning to open innovation to integrate applications and collaborate with business partners. Furthermore, around 70 percent are experimenting with application programming interfaces (APIs) which allow partners to develop applications that use their data and platforms.
Insurers looking to launch a platform business, together with telcos or retailers, need to take the following steps:
- Begin a pilot program that will prepare the organization and its partners for the launch of the platform business.
- Formalize relationships with the technology service providers that will support the platform environment.
- Extend internal platform and API developer programs into formal relationships with external partners.
- Measure and monitor the progress of internal and external platform and API programs using a variety of business, financial, and technical metrics.
- Promote within and outside the organization the initial apps and digital partner solutions built on the pilot platform.
- Embrace opportunities for market disruption by extending the pilot program to address key sectors of the business value chain.
For more information about the potential of platform businesses for insurers and their partners have a look at these links. I think you’ll find them useful.