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What is an Insurance Ecosystem? (Part 1)

It's been said that ecosystems are the future of insurance. But what exactly is an ecosystem? In part one of this two-part article, we’ll look at the basics of this new, integrated business model — what it is, how it works, and why it’s important for insurers to pursue ecosystems as a priority.

What is a digital ecosystem and how does it work?

You can think of a digital ecosystem as the virtual version of shared office space between businesses that offer complementary products and services. Common real-world examples include gyms and chiropractors; grocery stores and banks; and book stores and coffee shops. These symbiotic partnerships allow companies to reduce costs through shared resources and cross-promotion, while also benefiting consumers with convenient access to multiple solutions in one place.

A digital ecosystem uses a similar concept, connecting companies online and expanding capabilities to benefit both the organizations and the customers.

Consisting of trading partners, suppliers, applications, third-party service providers, and associated technologies, a digital ecosystem allows companies to create seamless, end-to-end processes by merging business applications and data integrations with the entire business network.

Challenges and Opportunities

The insurance industry has traditionally been slow to adopt and respond to new digital directives. Many companies are still dependent on legacy core systems for the bulk of their operations, making it difficult to keep up with the rapidly changing, technology-fueled marketplace.

However, the ecosystem model provides an opportunity for insurance companies – regardless of where they fall on the technology spectrum – to leverage the benefits of partner organizations. As part of an ecosystem, insurers can increase internal efficiency, deliver transformative experiences, and set themselves apart from the competition.

Providers and policyholders are gravitating toward ecosystems for their convenience and effectiveness. In fact, according to a recent Accenture survey, 84% of insurance executives consider ecosystems an important strategy, and 54% are actively seeking ecosystem capabilities.

Why the insurance industry, and why now?

According to the Accenture 2018 Disruptability Index, insurance ranks among the top industries considered to be most susceptible to future disruption. The report suggests that by 2022, digitally stagnant companies will likely suffer significant market share erosion.

Ecosystems present a unique opportunity for traditional insurers to expand offerings and deepen policyholder engagement across channels, geographical areas, and lines of business. By partnering with other organizations, insurance companies can reach a broader group of potential customers, tap into new sources of data, and improve established processes. Each member of the ecosystem gains the advantages of the entire network, without straining any one company’s existing resources.


At its most basic, the digital ecosystem is an interconnected network of companies, people, data, and/or processes that are linked together by the shared use of digital platforms to achieve shared goals. Offering powerful benefits for both companies and consumers alike, this new business model is quickly becoming an attractive option for insurance providers seeking to expand their capabilities.

In upcoming second part of this article, we’ll further explore how the ecosystem business model drives value for insurers, and take a look at specific use cases in auto, health, and homeowners insurance.

Continue to What is an Insurance Ecosystem (Part 2).


If you'd like to learn more about ecosystems and other trends in insurance, check out the eBook, The Insurer's Guide to Going Digital.

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Patricia is passionate about helping insurers continue to achieve success in a rapidly changing industry. She offers news, insights, and tips to help you modernize your organization, boost efficiency, and provide a superior customer experience for today’s policyholders.

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