# Open architecture innovation’ will drive new growth for insurers, according to Aon GIMO report
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2017-09-12
Category: LIFESTYLE
Category URL: https://financedigest.com/category/lifestyle
Meta Title: Aon plc Report: Insurtech Enhancing Insurance Industry Growth
Meta Description: Discover key insights on how Insurtech and the on-demand economy are reshaping the traditional insurance sector in Aon plc's Global Insurance Market
URL: https://financedigest.com/open-architecture-innovation-will-drive-new-growth-for-insurers-according-to-aon-gimo-reporthtml

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On-demand economy highlighted as key area of opportunity for traditional industry

Aon plc (NYSE:AON), the leading global professional services firm providing a broad range of risk, retirement and health solutions, today launches its annual Global Insurance Market Opportunities (GIMO) report, which examines key areas of potential growth for insurers.

The study highlights that Insurtech could be an enabler rather than a disruptor of the traditional insurance model. The fast-growing entrepreneurial Insurtech segment – that has secured approximately USD14bn in investments to date across more than 550 start-ups globally – may have a more [supportive role for insurers](https://www.financedigest.com/how-technology-can-support-insurance-business-growth.html "How technology can support insurance business growth") than previously thought via ‘open architecture innovation. Established organizations play an important role in open architecture innovation, by collaborating in a framework which has both standards that enable scalable solutions for clients and the flexibility that encourages entrepreneurial innovation.

The report reveals that three of the leading areas where analytics can help with insurance industry growth – cyber risk, casualty catastrophe risk, and pathogen risk – could become increasingly insurable through collaborations with Insurtech companies, and technology and analytics providers, thereby opening up new [opportunities for insurers and reinsurers](https://www.financedigest.com/reinsurance-demand-increasing-as-growth-opportunities-emerge-according-to-aon-outlook-report.html "Reinsurance demand increasing as growth opportunities emerge, according to Aon outlook report") to provide new and enhanced products.

Meanwhile, the on-demand economy (ODE) is presenting both opportunity and disruption to the traditional [insurance sector, through the requirement for a greater range of time-based insurance products that recognize that assets such as cars](https://www.financedigest.com/ten-things-youre-doing-that-are-invalidating-your-car-insurance.html "TEN THINGS YOU’RE DOING THAT ARE INVALIDATING YOUR CAR INSURANCE") and homes are increasingly used on both a commercial and personal basis – driven by the increasing utilization of services such as Uber and Airbnb.

In terms of disruption, the report highlights that US motor pure premiums could decrease by more than 40 percent of their 2015 levels by 2050 – the point at which autonomous vehicles are expected to be fully adopted. However, while accident frequency is anticipated to reduce as a result of driverless technology, the study warns that accident severity could increase and that a transfer of liability could occur, from [drivers to car](https://www.financedigest.com/pimp-my-ride-south-east-drivers-most-likely-to-modify-their-cars.html "Pimp my ride! South East drivers most likely to modify their cars") manufacturers and software providers.

Paul Mang, Aon’s Global CEO of Analytics, said: “We know that the [insurance sector](https://www.financedigest.com/whats-driving-consumer-opinion-in-the-insurance-sector.html "What’s driving consumer opinion in the Insurance Sector?") is facing challenges in the current macroeconomic environment; so we should expect leading organizations in the industry to drive change.  We are already using technology to make us more efficient as a sector, and to expand into emerging risk markets. However, the true transformation will happen as we re-imagine risk management altogether. In this new environment, collaborations, or what we call open architecture innovation, will be key to creating net new growth.”

The 2017 GIMO report contains extensive analyses of the [cyber sector; it reveals that the handling of cyber risk is moving beyond traditional insurance](https://www.financedigest.com/using-threat-intelligence-to-minimise-cyber-insurance-risks.html "Using Threat Intelligence to Minimise Cyber Insurance Risks"), and that a typical cyber insurance policy should now offer access to a panel of service providers for incident response and additional services. These services – whether offered by a carrier directly or through partnerships – will provide insurers with a way to broaden their value proposition beyond the traditional insurance policy.

The report can be found at the following link: [http://aon.io/2vMRrBC](http://aon.io/2vMRrBC)


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