(Toyota FT 1 Graphite, designed in collaboration with BMW. Source: Toyota.)
For many companies, collaborating with a “competitor” can prove to be a sound strategy. Five years ago, BMW and Toyota Motor Company announced plans to work together on developing an environmentally-friendly luxury vehicle. These two automakers knew individually neither had the necessary experience or capabilities to develop a luxury vehicle, but by sharing the expertise and strengths of each company, they could succeed. Similarly, P&C insurers have started collaborating on creating a more customer-centric environment. Powered by their digital distribution platform, these carriers take part in a universal market network, “sharing” products from a vast marketplace to meet more of the needs of the customers they serve without taking on additional risk.
Why Co-Opetition is Essential to Success
While collaborating at this scale may sound counterintuitive, Bob Mudge, President of Consumer and Mass Business at Verizon explains that it is not: “At Verizon, we are committed to the concept of co-opetition. For example, Verizon is collaborating with content providers and software developers to provide live TV and video-on-demand content both inside and away from home to FiOS TV customers.”1
There is similar thinking in the P&C insurance industry where forward-thinking carriers are positioned to expand premiums, increase revenue, raise customer retention, and boost market share through participation in a market network. It works on the simple premise of competitive co-operation.
When an insurer is not able to offer a customer all of the insurance products he or she needs, that carrier risks losing business. In an Amazon world where a single click of the mouse can deliver multiple products, 78 percent of customers prefer purchasing all of their coverage from a single insurer.2
By leveraging products from another provider, who also takes part in the universal market network, carriers can deliver that one-stop shopping experience. Bundling the products they manufacture with those from other carriers allows them to increase customer acquisition and retention without shouldering additional risk.
It’s fairly easy to describe a case in point. Consider the customer that has had auto and home insurance with the same provider for years. After adopting a dog, he realizes that his new pet has multiple health issues and decides to take out pet insurance. If his long-time insurer doesn’t offer pet insurance, the customer will find it elsewhere and for the sake of simplicity, may take the bulk of his business with him.
When insurers are part of a universal market network, they can easily find the coverage that meets customers’ needs, giving them the ability to close a valuable sale and maintain a solid relationship.
Competitive cooperation, in this sense, has other advantages beyond boosting customer retention. Without increasing their risk exposure, carriers actually sell 1.4 more of their own products for every bundled solution sold, and keep up to 15 to 20 percent of the commissions in-house.3 Customers are more satisfied and carriers increase premiums, sales and revenue by co-operatively operating with their competitors
Overcoming Product Development Costs
Competitive co-operation also aids insurers in the area of new product development, allowing them to expand their offerings without taking on the obstacles associated with product development, risk analysis, and marketing, as well as the regulatory hurdles that keep many insurers from bringing products to market. A universal P&C market network gives insurers access to the products they need today without lengthy development cycles, and offers invaluable insight on which products to potentially consider for future development, while reducing the risk for carriers.
How to Join a Universal Market Network
Competitive cooperation has its rewards in all industries, but P&C insurers realize particular advantages by taking part in a market network. Because a universal market network is part of its associated digital distribution platform, carriers also gain rapid access to the digital capabilities necessary to compete in today’s environment. Agents are able to quote, bind, and issue insurance products for their customers in minutes, compared to standard times of hours, days, or weeks, delivering all of the products a customer wants through their channel of choice.
Through competitive cooperation, insurers meet more of their customer’s needs, more often, a fact that is evidenced in the bottom line as premiums and revenues soar.
 Mudge, Bob. Why Collaboration Is Crucial To Success. Fast Company, 2 Jan. 2014. Web
 J.D. Power. Gen Y Consumers More Likely to Split Their Policies Across Multiple Insurers than Any Other Generation. J.D. Power, 17 Sept. 2015. Web
 Scism, Leslie. Insurance Fees, Revealed. The Wall Street Journal, 30 Mar. 2012. Web