The U.S. insurance industry wrote more than $1 trillion inpremiums in 2014, with life and health insurers recording 54percent of that total. While that might sound like a strongendorsement for the current structure of the industry, the ways inwhich life insurers do business need dramatic change. Inparticular, life insurers should be takingbetter advantage of digital capabilities to expand their saleshorizons and target new and/or underserved market segments.

Most insurers are investing in their current business model, butthere is a group of insurers — “digital transformers” — that arelooking beyond insurance, optimizing their current model wherepossible, but also innovating and diversifying their portfolio ofcapabilities. These carriers are keenly aware of the disruptivethreats facing the industry, and are working to take the industryin new directions.

There are a number of areas where life insurers can expand theirrole and seize new opportunities for growth. One is caring for anaging population. In Japan and other Asian cultures, there has beena tradition of extended, multi-generational families taking care ofthe elderly. In other countries, however, this is not often thecase, with families widely dispersed and older people lessdependent upon family care. This situation creates a need for newservices focused on the quality of life of an agingpopulation.

According to the Accenture Consumer-Driven Innovation Survey,half of all Japanese consumers would be interested in having theircarrier provide not only insurance but also information and adviceabout how to reduce risk in their lives. We believe there aresimilar, if not higher, levels of interest in other developedcountries.

A second opportunity for growth is to become a trusted advisor,meeting the evolving, unique needs of customers and becomingembedded as a “life coach,” offering frequent, highly personalizedadvice. In effect, the insurer becomes an aggregator or conciergethat brings together offerings from related providers, addressing alarger portion of the needs of individuals and corporations. Thisre-positioning allows insurers to extend their relationship withcustomers to become oriented around services and guidance ratherthan about policies.

Three concrete steps that insurers should be taking today tomake the leap to new growth curves, even as they work to streamlineand digitize their existing business model, include:

1. Create a “red team.” Generally,insurers cannot and should not attempt to initiate a business modeltransformation solely within the four walls of the organization.Risk-averse cultures, large-scale governance and time-consumingprocesses are likely to undermine attempts to re-invent. Firmsneed to have the courage to launch a “red team” or a separateentity charged with identifying the latest customer needs andbehaviors and creating new services that may cannibalize theexisting business where necessary. Most firms need to have thisfunction separate from the traditional business in order to trulyfoster a new approach to innovation.

2. Transform to a customer-centricculture. Customer-centricity involves thinking aboutproducts and services in terms of what the customer needs now andwhat they will need in the future. This new approach will helpinsurers become an increasing part of the daily lives of theircustomer and a primary source of innovation for insurers. Many of themost interesting ideas about new services are more likely to comefrom outside the industry rather than from long-standing insuranceindustry veterans.

3. Partner with innovators to create newservices. In critical technology areas such as theInternet of Things, cloud computing, big data, wearables andanalytics, insurers are (or are considering) partnering withtechnology companies to quickly bring innovation to market. Forexample, Northwestern Mutual purchased LearnVest, a provider ofonline financial planning services, to accelerate its own growth inthis rapidly expanding arena.

Similarly, John Hancockrecently entered into a partnershipwith Vitality, a company that integrates wellness programs withlife and health insurance, to offer a new life insurance solution.The offering provides policyholders with financial protection aswell as opportunities to save on their annual premiums and earnrewards and discounts for taking steps to improve their health.Life insurers can place themselves at the center of innovation byproactively defining a new role that is more entwined with thelives of their customers. But this will require an unorthodoxmindset. The role of the new insurer is to make technologicaladvances a safe reality. In so doing, insurers can benefit fromdisruption and, as they have done in the past, contribute greatlyto economic growth.