We talk about innovation all time. Yes, it is mandatory. Yes, your competitors are doing it. Yes, it means fundamental changes within an organization. But what does innovation really mean, and where do you start?
An innovation is defined as a new method, process or product. For insurance, the quest to build something new or transforming has quickly become foundational. The focus on innovation has naturally created an industry-wide platform that pushes us to rethink, redesign, reimagine and reinvent our roles, structures, products, services, processes and technologies.
We’ve been talking about and tracking innovation for several years now. And creating a culture of innovation is probably still the biggest hurdle. We are operationally focused. We are successful. We’re financially strong. It’s hard to change what you’re doing right. It’s also hard to change when you’re going 100 mph every day. Yet, despite challenges across the industry, we’re seeing a lot of innovation models appear. And in those models, we see segments of change and real action on innovation.
See also: Linking Innovation With Strategy
What’s fascinating about 2017 is that almost all insurers in our research (more than 90%) have some type of innovation happening across their companies. It has taken hold, even at a regional- and small-insurer level. It’s happening, from the $500 million companies all the way down to the $50 million companies. It takes the forms of what could either be called an innovation initiative, a digital strategy of which innovation is a part or tracking and partnering with insurtechs and emerging technologies with innovation as a part of that.
In other cases, innovation is disguising itself in the strategic initiatives. Or, it’s just flat-out called an initiative within the company in its own right. About half of the insurers are still in the development phases of innovation, trying to define it, trying to figure out the process, the people, how to invest in it. And the other half are maturing. Some of those have been creating and evolving innovation labs for three, five or even seven years.
I remember our first SMA Summit, when we gave an Innovation in Action Award to Allstate for creating an innovation lab. It was just the beginning of insurers thinking of innovation in a big way. Now, innovation labs are virtually everywhere, on every scale, inside and outside the structure of the insurance company walls.
As an industry, and for most insurers, it’s still a struggle to create innovative thinking and tie it back to strategies and operations – or to flip the approach and take our business strategies and tech investments and innovate those. Or to really find the value for the operations, or to see the value from a customer or agent/broker perspective. At the end of the day, insurers are still required to pay a claim, make money and provide dividends to either their shareholders. Right now, it’s a balancing act between fulfilling the needs of the daily business and progressing into the future with innovation initiatives.
This year’s SMA Summit is scheduled for Sept. 17, 2018, and the theme is Transformation in Action. I can’t wait to hear the stories shared about the innovations realized. We have come such a long way in so short a time. It’s amazing to think that, just seven years ago, the thought of an innovation lab was groundbreaking.
Finally, if you are just beginning, or unsure where to start, remember that starting small works! Just start somewhere. It may take a leap of faith to acknowledge that there are places in your organization that need to be transformed. But today, there is more support than ever – from all of us at SMA, from customers, from solution providers and even from competitors. The time is now. Just jump in!
Read our latest research report on innovation: Innovation is Mandatory: SMA Annual Innovation in Insurance.