The South African insurance landscape is becoming increasingly competitive, as it is largely shaped by disruptive digital transformation. In this scenario, individual insurance providers continuously strive to deliver innovative products to gain a competitive edge.

This factor is fostering an environment that is conducive to embracing partnerships between competing players, an imperative that will unlock more value for insurers and customers alike.

A win-win for all
The market, therefore, requires constant innovative thinking around products and services. The highly competitive nature of the sector dictates that insurers investigate cooperative competition (coopetition), which occurs when companies interact with partial congruence of interests. While it may seem counterintuitive to partner with rival players in a competitive market, there is nothing wrong with coopetition if both companies benefit from the opportunities they build together.

An article, recently published by the Insurance Innovation Report, argues that collaboration among complementary organisations benefits customers, by filling experience gaps and providing them with more streamlined better services. Currently, the coopetition ecosystem method is the way to go. It is a win-win for all parties involved. Brands/companies lean on each other for the success of their overall business operations and growth. They also promote the creation of holistic solutions that accelerate the manifestation of benefits for both the customer and businesses. The ecosystem method helps the companies to leverage the right resources, as well as address and overcome change.

Sharing resources, to add value
It does not compromise the competitive advantage of individual companies, nor does it negate competition within a sector. It typically involves non-core business units, processes, or services.

For example, while two insurers might compete for market share based on offering similar insurance products and services, they may opt to enter into a coopetition agreement to share underwriting resources.
To adapt to the rapid changes prevalent in this industry, it is not always necessary for insurers to pivot their entire strategies to meet an objective. Sometimes it only requires the expansion of what they already have in place, and working to improve upon it, instead of upending it completely.

In this manner, they do add value to their operations. There are unprecedented technology solutions and services flooding the insurance landscape. This poses strategic questions for companies for should they "build, buy or partner?" However, buying or building your own solutions requires massive capital investment for investment that may or may not work. Therefore, it makes more sense to test and learn through strategic partnerships. A recent article, published by KPMG, looks at how things in the insurance industry are playing out. It explores the value of competition versus coopetition, during a time when insurance is prone to disruption, as several players continue to compete and bite into each other's profit margins.

Experience gains from this move
It is evident that insurers must seriously consider their options in terms of remaining profitable. Their actions need to tilt more to their survival. Ideally, insurers need to cast their investment nets wide and rely on experts within subdomains that can complement their overall strategy and vision. The concept of coopetition is not new in the business world. It has been tried and tested and it works. Initially, insurers thought utilising independent agent channels would be detrimental to their operations, but now they are experiencing gains from this move. Conquering the toughest global challenges requires a joint effort. No single company or sector can do it alone. The coopetition ecosystem is the