In nature, an ecosystem refers to a network of interactions among organisms, and between organisms and their environment. In order for the ecosystem to thrive, its members must strengthen one another and advance as a collective whole. Business works the same way:
Business ecosystem: An economic community supported by a foundation of interacting organizations and individuals – the organisms of the business world. The community produces goods and services of value to customers, who are themselves members of the ecosystem. Member organisms also include suppliers, lead producers, competitors, and other stakeholders.
A business ecosystem strategy is especially important in today’s insurance industry environment. Insurers must work with reinsurers, health professionals, tech companies, service providers, and even other insurers to innovate and move their companies and the industry forward. In Asia, where new product development is the key driver of business growth, multi-discipline partnerships are essential.
To develop innovative business ecosystems, the right conversations need to take place, and those conversations require the right vocabulary:
Co-opetition: increasing the size of the market (collaboration), while dividing the market (competition)
Co-creation: initiative that brings different parties together in order to jointly produce a mutually valued outcome
Co-branding: a marketing partnership between at least two different brands of goods or services
Complements: product/service that makes another more attractive as compared to that product service alone
Value network: social and technical resources within and between businesses, connected by interactions
Added value: the size of the market when you are in compared to the size of the market when you are out
Allocentrism: centering attention and actions on others to assess value and anticipate reaction and perceptions
Learning these terms is a good start, but words only go so far – insurers putting them into action will be those who lead the next wave of growth. The cliché holds true: growth is no longer about competing for a bigger slice of pie, but partnering to create a bigger pie.
At RGA, we work with a variety of stakeholders to develop innovative, “bigger pie” solutions. In Asia alone, RGA has partnered with clients and other members of our business ecosystem to introduce more than 30 first-of-their-kind products in multiple markets over the past five years. A few of the firsts from this past year include a scaled hospital cash product in Korea, a diabetic-focused wellness program in Hong Kong, and a critical illness product sold to seniors via direct-response TV in Thailand.
Continued industry innovation will require more diverse and stronger partnerships. Over time, members of a business ecosystem co-evolve their capabilities and roles, and tend to align themselves with the directions set by one or more central companies. RGA is creating a keystone position in its ecosystem in Asia. Our goal is to create value for the community by enabling members to move toward shared visions, to align their investments, and to find mutually supportive roles.
The insurance industry is primed for alignment with intersecting industries and for the next generation of innovators and entrepreneurs to lead the way.