May 19, 2011
I got jolt this morning, and it wasn’t from my coffee. The headlines in my morning insurance news push were all about last night's announcement that Allstate was acquiring esurance and an agency sibling, Answer Financial for $1 billion (http://www.bloomberg.com/news/2011-05-18/allstate-to-buy-esurance-in-1-billion-deal-as-wilson-adds-online-sales.html). Along with the fact that esurance itself has gone to market with what every ebusiness executive has stated as the big strategy over the near-term—giving the customer the choice in how they want to engage with its new “Technology When You Want It, People When You Don’t” tagline—this deal could well be the start of a more interesting trend: a bigger wave of M&A among Tier 1 carriers.
This news was especially tantalizing because we just wrapped up a series of interviews with insurance thought leaders to get a perspective for how the insurance industry was going to look in 2020. We wanted to understand how these changes were going to impact the jobs of ebiz executives in insurance. This is what we heard:
Enabled by “big data”, carriers are going to:
- Shed and acquire business lines to be more specialized and obviously more profitable
- Make some splashy acquisitions (like this one),
- Launch new and innovative business models (like a “lights out” insurer that, in exchange for low premiums, policyholders would have to do more for themselves)
- Challenged by new market entrants who “get” data
All of which have big implications for what insurance ebusiness teams will be challenged to do. Look for our thoughts on what 2020 is going to mean later this quarter.