March is the time of baseball spring training and March Madness basketball. As of 2020, March also became synonymous with COVID-19. A year ago, as the pandemic increased pressure to every industry, March Madness never got started, and Major League Baseball's spring training season also was abruptly canceled after the first game. This year, optimism is in full swing. March Madness is happening and speculation around the 64 teams is hot. At the same time, spring training started this week, with fans in attendance! Baseball may not be back to the old normal, but it will have fans and a full-season schedule. This means that 2021 spring training is especially crucial to team performance. How baseball's preparatory period (à la spring training) relate to the insurance industry? Here's how: Spring training is about constructing a strategy, organization, processes and technologies that will help the team win. Players hone their skills. Trainers and coaches tweak methods and models. The back office aligns the strategy and goals of winning with overall profitability. Everyone is charged with improving the fan experience, whether it is adapting the supply chain for concessions, installing a new digital scoreboard or reprioritizing and trading resources. Regardless of the strategy, teams must prepare. Insurers are just as concerned about winning as athletes. Today's market is digital, customer-driven, and ecosystem/partnership enabled. So carriers are challenged to put together a winning team to create growth and make a profit. They have similar questions to answer as a sports team: |

• Should we add the capabilities we need to capture the market?
• Should we reprioritize our resources to accelerate strategic initiatives?
• Can we focus and devote this season to preparing our organization for the partnerships, supply chains and ecosystems that will keep fans coming back?

Majesco recently released Part 1 of its two 2021 Strategic Priorities report. The publication surveyed the players, opportunities and challenges at work in the insurance business as seen through the eyes of insurance executives. As a part of that report, we surveyed insurers on their level of partnership planning, piloting and rollout. Not surprisingly, we found a strong relationship between partnership and new products and channels. |

'Partnering? There's a gap for that.'

Competitive market position is about constructing an ecosystem that plays to your strengths and incorporates partners to fill gaps or weaknesses. Gone are the days when companies would think, "Anything you can do, we can do better." Today's mantras are: |

• Anything you can do, we might be interested in.
• Any market you reach might be good for us.
• Any tech advantage you might own, we might be able to use it to our advantage.

It's all about doing more at speed! In 2020, Majesco's Strategic Priorities survey revealed a relatively slow start in establishing partnerships and ecosystems, with more organizations thinking about it rather than planning, piloting or implementing. Unfortunately, we saw some backsliding on several partnership initiatives, perhaps driven by shifting priorities due to COVID, as seen in Figure 1 (above). Now insurers must rapidly shift into high gear to accelerate and avoid lost opportunities to reach new or underserved markets as well as to be at the front in establishing partnerships before others. Failure to recognize the criticality of partnerships and ecosystems is a major blind spot. Our research, as well as numerous other studies, have shown strong customer interest in buying insurance through other partnerships and channels. Furthermore, the development and access to APIs to connect to new partnerships and ecosystems is increasingly important for consideration. It might help to look at just two examples of companies that have cultivated a partnering environment in order to fill their competitive gaps, planting new products in new markets and opening new channels for current products. For example: |

• Chubb — Launched Chubb Studio "digital insurance in a box." Partners can access their products, services and claims digitally and integrate what they do into what the partner does — embedded insurance. Initial products offered include health & well-being, home contents, gadgets, travel and small businesses.
• Nationwide — Launched their Partnership Program for partners and developers to digitally provide Nationwide's products (including auto, home, commercial, pet) on the same digital platform, making the partner experience "quick, easy and seamless." It provides an integrated "front door" where companies can quickly enable a partnership with Nationwide.

Our joint research report with PIMA, Navigating A New Era of Digital Technology and Customer Expectations, highlighted that companies involved in program and affinity business are well ahead of others in setting up and leveraging ecosystems and partnerships, moving from traditional to new, innovative relationships. Based on this year's Strategic Priorities responses (illustrated in Figure 2 above), the gaps between insurers with and without program/affinity business were significant and growing as compared to last year's Strategic Priorities results' upwards of 40-50% gap difference! Given the rapid development of ecosystems, the shift to a platform economy, and increased focus on a broader customer experience dependent on partnerships, these gaps offer those actively working with ecosystems and partnerships the opportunity to accelerate and tie-down relationships while others lag behind and ultimately lose out on the opportunity. |

New products and partners

Not all insurer segments are finding it difficult to make partners and to capitalize on opportunities. Our research has found that insurers with new products are blowing away their traditional product counterparts in leveraging partnerships and ecosystems, as seen in Figure 3 above. Multiline insurers are a distant second in most of these activities. Traditional P&C and L&A/Group segments appear to be resigned to traditional channels rather than expanding channel choice and reach. The challenge is that they will find limited opportunities for partnerships the longer they wait. This will limit, if not contract, their market reach and growth opportunities as a new generation of buyers increasingly turns to alternative channels. The relationship between new products and new partners seems to indicate that creating a competency within new product development opens the doors to new partners and makes it easier to craft customer-ready ecosystems. Here is where planning and training become extremely important. Looking ahead, insurers that wish to compete across all current lines of business must bring their best planning to the table and introduce the tools needed to capture the opportunities. The enormity of the task can seem daunting, but in reality, it's a mental game. Ecosystems of partners already exist. Ecosystems of insurance apps, services and APIs already exist. Majesco, in fact, has taken great care to curate these partners and ecosystems. All that is needed is the willingness to shift gears and an openness to new methodologies that will ultimately prepare the organization to shed technology debt and become responsive. |

Regulatory perceptions vs. new rating realities

Ask any insurance boardroom executive if regulatory issues constrain growth, and 95% will say, "Absolutely." Complex state regulations have traditionally been viewed as a barrier to the industry's attempts to try new things and a barrier to new competition entering the market. But this is changing. Contrary to the common perception, regulators are taking steps to foster innovation and working with organizations that are bringing new products and business models to market. The shift is looking at regulators as partners working together as the industry shifts to a new digital era of insurance. With the implementation of insurance innovation sandbox environments in many states, we now know that regulators realize the importance of innovation to meet the changing needs and expectation of their citizens whose interests they are pledged to protect. AM Best added fuel to the innovation imperative with the introduction of its Innovation Rating criteria. And many insurers who are developing new, innovative products are proactively working with regulators to guide and speed the process. Yet, most insurers have not yet picked up on the importance and impact of regulators as partners. Surprisingly, participation in a sandbox was particularly low among the P&C-only (average rating of 1.6) and L&A/Group-only (1.7) segments suggesting they are following traditional products and paths for approvals. The innovation practices to support the AM Best innovation criteria remained the same. This is actually surprising given the poor initial results of the Innovation Ratings AM Best published in March 2020. We can hope that 2021 will bring more focus and alignment. |

Partners, ecosystems and inspiration

We see big bets being made in new business models, products, and services from both InsurTech and incumbent insurer leaders who are "early responders," capturing customer and market attention. Some of these companies emerged after the 2008 Financial Crisis or in the early stages of InsurTech; others are incumbents who made bold moves, while others are outside industry players. Regardless, they serve as examples and inspiration for the types of bold moves the rest of the industry needs to make in order to compete and succeed in the future of insurance. |

• Automotive Players: GM, Tesla, Volvo
• Outside Players: Petco, Intuit, Walmart, Credit Karma
• Industry Greenfields: Say Insurance, Spire, Haven Life
• Reinsurers: Munich Re, Swiss Re, RGAX
• Startups: Pie Insurance, Next, Lemonade, Root, Ategrity
• Embedded Insurance: Volvo, Wrisk, Mylo
• B2B2C Ecosystems: PingAn, Allianz, Nationwide, Chubb, AXA
• Membership/Subscription: BOXX Insurance, Zipcar
• On-demand Insurance: Starr Insurance, First Insurance Company of Hawaii
• Partnership and Ecosystem: Acko + Amazon, Nationwide + Toyota, Chubb + Hodinkee, Root/Lemonade/Ladder Life + Sofi

Change, as we have known it, has changed. It is faster, deeper, wider and more powerful than we've ever been used to before. Forward-thinking leaders are making bold, warp-speed moves with a two-speed strategy to optimize today's business while simultaneously creating their future business. They are focused on next-gen platforms, ecosystems, new channels, new products and business models — all key strategies that influence and accelerate growth. In this new era of insurance, leadership and understanding, market shifts matter. Planning and execution matter. Speed matters. Denise Garth is chief strategy officer at Morristown, New Jersey-based Majesco, an insurance industry software and service company. She is responsible for leading marketing, industry relations and innovation in support of Majesco's client-centric strategy, working closely with Majesco customers, partners and the industry. She can be reached at [email protected], on Twitter @denisegarth or on LinkedIn. The article first published in the Majesco blog and is reproduced here with permission. Keep reading... |

• A guide to future-readying your insurance business
• Examining the future of insurance ecosystems
• 3 ways open ecosystems help P&C insurers thrive