Tag Archives: p&g

Are You Innovating in the Dark?

The insurance industry is ripe for disruption, drawing a flood of investment and spurring all sorts of smart conversations. But many insurance companies today are either confused or are just shooting in the dark hunting that “big thing” (unknown) in the name of innovation.

The good news is that the fear of disruption has pushed the innovation agenda for many companies. But there are only a handful of players in the industry who are taking innovation seriously. For such companies, innovation is never accidental, seasonal or impulsive. Rather, it is an integral part of the company’s culture of organization and is a continuous process.

Are you a victim of “innovation phobia?”

Innovation makes many players in the industry nervous, forcing them to act fast to do something innovative or deliver superior values to clients in difficult times, spurring a reactive innovations race in the market.

The sad part is that such “knee jerk” reactions last for short lifespans and do not deliver any value to an organization. Typically, such momentum often dies within 12 to 18 months because of reasons such as change of organization priority, leadership change, shortage of funds, skill shortage, poor support within an organization, company politics and resistance of companies to change. Companies burn millions of dollars each year in the name of reactive innovation. Is it time for organizations to assess if they are the victim of the innovation phobia? Are there better ways to use their funds? The answers are yes.

See also: How to Create a Culture of Innovation  

Build meaningful offerings, not just elegant facilities and prototypes

In the last 12 months, innovation activities have ignited insurance industry collaboration with startups and insurtech. Other innovation players are picking this up, which is a good thing and a positive sign for the industry. Keywords such as “incubator,” “accelerator,” “innovation labs,” “garages” and  “design thinking” are gradually becoming the jargon of the insurance industry. Many companies have built (or are building) large, elegant facilities for innovating, assembling teams, creating fancy prototypes and leveraging newer technologies. Few companies are funding startups and few have started separate venture capital funds to capitalize future opportunities. Things are really changing — and fast.

Still, the big questions remain:

  • Are these real attempts toward innovation?
  • Are these meager reactions triggered because of innovation phobia?
  • Are these attempts to create a market illusion that your company is innovating?

None of the above aspects can guarantee success. The hard reality is that such efforts are not sufficient for innovation. Innovation is not about building fancy facilities or shiny prototypes that anyone can mimic easily. It is not about the number of experiments or proof of concepts you are developing. It is also not about the number of hackathons you sponsor or the total partnerships you have with startups or insurtech firms.

It is about creating something meaningful for customers that is distinctive in the market and gives you a long-term competitive advantage. And it is about understanding your future customer’s needs, market insights and evolving industry trends in a timely manner (ahead of your competitors) and about building something meaningful that customers will value the most.

Addressing the “missing” elements of innovation in your organization

Innovation is not an easy thing and cannot happen as a matter of reactive actions. Unless organizations build a culture for innovation; make it a continuous process; invest in people and capabilities; and commit themselves for long-term innovation, any efforts toward achieving innovation are going to be shortsighted. Failures are an inevitable part of innovation, so building a culture that encourages failures and motivates teams to think big, imagine the future, gather insights, validate assumptions and deliver value with greater agility are important part of innovation. It is time for companies to be honest and discover the missing elements of innovation in their organization. Innovation is about building a foundation for the future of the company; it is about creating a futuristic business, talent, expertise and the people of tomorrow.

Many of today’s innovation efforts are merely trying to keep pace with the emerging technologies — such technologies are threatening the existing business models of insurance companies. If you look closely, you would agree that such scenarios have existed for many decades in the industry. It is impossible to keep the same business pace when technological changes are maturing and evolving at a faster pace. There is a need to look for some missing element in your organization, which, when paired with emerging powerful technologies, can bring the real innovation out.

Invest in market intelligence and competitors’ moves

Successful innovation demands long-term organizational commitment, unique market insights, customer validation-feedback, talent, organizational agility and correct assessment of timings of market readiness for any new value proposition.

If you look closely at the history of some of the most successful innovation companies (such as Google, Apple, GE, P&G, PepsiCo and Toyota), you would notice that such high-performance companies have assessed the market, customer behavior and competitors’ moves very cautiously and constantly and have made appropriate investments in the journey for innovation. These companies have built an innovation culture over years. Unfortunately, today, companies do not have the patience to gather the right intelligence on the market and the insights on customers’ behavior. And many companies just want to take advantage of becoming the first movers without doing the proper homework about market readiness, competitors, customer needs and the industry preparedness.

Beware of those fancy insights that everyone knows

Many companies’ innovation agendas get biased and influenced by a few survey results from the top consulting and analyst firms; few companies are also using future market size projections from the global research companies as a part of justification for the company’s innovation efforts. By and large, the entire insurance industry is referring to the same set of intelligence and insights. If that is the case, there is little possibility that meaningful offerings would emerge that can disrupt the industry as a whole. If you are going to create another new-style offering (similar to that of others or that can be mimicked easily), by leveraging the similar market insights and similar technologies, your innovations efforts are likely to deliver poor results.

Beware of those commoditized insights and research reports that may distract you from doing genuine innovation.

See also: Innovation Won’t Work Without This

You must invest in assessing market intelligence and customer intelligence continuously. Your futuristic offerings are likely to be as differentiated as those of the unique market and customer insights you gather. Align your innovation efforts accordingly, leveraging the best proven technologies and the expertise of your people and partners.

Going back to basics

Industry players must assess if they are addressing innovation requirements holistically. How accurately a company infers future market movement, customer behavior and demands — and creates offerings in a timely manner ahead of its competition — plays a critical role in the success of innovation. If you think this type of innovation sounds more like gambling or shooting a gun up in the air, you are advised to spend your money on some other initiatives that can improve your business performance faster.

Now is the time to invest in your people and build capabilities (underwriting, risk management, sales and distribution, claims, etc). It is the time to build core foundations and address the missing elements of innovations within your organization.

Conclusion

Innovations are critical for a company of any size. Insurers must commit themselves to innovating and must build an innovation-centric culture in their organization. Insurers must honestly assess if they are a victim of innovation phobia and must address the missing elements and innovation gaps in their organization. The distinctiveness of market insights, customer preferences, competitors’ moves and industry readiness plays an important role in the potential success of the innovation. Innovation is never accidental but, rather, is a continuous process that requires the best talent, best capabilities and agility. The role of technology and the startup community cannot be ignored in innovation. Insurers must stop innovating in the dark and instead start fixing the broken elements that are hindering the company’s growth.

Learn about Innovator’s Edge, a first-of-its-kind insurtech matchmaking platform.

3 Ways to Improve Agent/Insurer Links

As a lover of all things tech, I also love science. Recently, while thinking about the future of the insurance industry, I was taken back to something I learned about in my sixth grade science class: the concept of mutualism, where two species “work together” and each benefits from the relationship. For instance, an oxpecker (a kind of bird) eat ticks off the bodies of large mammals, such as a hippo, zebra or giraffe.

The concept of mutualism is being embraced by some of the world’s most successful companies. In fact, perceptive leaders at P&G, Nestlé and GE Digital have all recognized that mutuality and interdependence with partners fuels growth.

So how does mutualism apply to the independent insurance channel?

While huge efficiencies have been gained by insurers and independent agents who are using digital technology for internal process automation, this alone is simply not enough to grow and thrive. We live in digitally driven, hyper-connected times. Thus, it is critical for agents and insurers to extend their use of technology beyond their own offices and form an insurance ecosystem whereby everyone involved — agents, insurers, MGAs, wholesalers and, ultimately, insureds — wins.

Digitally connected agents and insurers can exchange accurate data for quoting, market identification, underwriting, billing and customer service. Agents can work more efficiently with insurers to provide access to advice, product range, insurer choice and localized personal service. Ultimately, there are better, mutually beneficial relationships between agents and insurers, which increases the value of their service to insureds.

As key business partners in the insurance lifecycle, agents and insurers have an irrefutable interdependence on one another and therefore have a stake in each other’s success. To fully capitalize on this mutualism and fuel growth, agents and insurers must increase their connections by using automated data exchange technologies such as download and real-time and market search tools that will reduce expenses, speed service and strengthen business relationships.

See also: Why the Agent Will NOT Be Disrupted  

The good news for agencies and carriers is that all of these connectivity services are available today:

  1. Download: This data exchange solution enables insurers to automate delivery of information from their systems directly into an agency management system. Download eliminates the need to rekey data into multiple insurer web portals to verify information. Recent research indicates 60% of agents save at least one hour per day using ACORD eDocs and ACORD Messages download services. With more than 1.8 million download connections available and only 41% activated, there is immense opportunity for agencies to take advantage of the time-saving and customer service benefits of receiving all available download services from your insurers.
  2. Real-time rating, service inquiry and claims: An automated data exchange can provide instantaneous lookup of data in an insurer system from within an agency management system or comparative rater, enabling agencies to quote; inquire on a policy, bill or claim; submit a First Notice of Loss; obtain loss runs; and more in real time. By making these requests through the management system, agencies can reduce duplicate keystrokes and respond to clients quickly and easily, without having to log into an insurer web portal or waste an insurer’s time responding to one-off requests. This not only saves time and effort by eliminating manual entry, it also minimizes errors, provides an E&O trail within the agency management system and enables agencies to deliver rapid, more efficient service to meet the expectations of today’s consumers. According to the 2013 Agency & Brokerage Technology Survey, agents recognize 53 minutes of time savings per employee per day when using real-time tools. With more insurers adopting real-time technology for comparative rating and service, they can increase the opportunity to showcase the advice and value of working with an independent agent by providing clients and prospects the best policy options and overall improved customer service.
  3. Market search tools: These can enable you to find more and better markets for an insured’s risk. A long-time industry challenge has been identifying and easily communicating insurer appetite for commercial risks. The process has historically been costly both in time and money, and nearly 60% of commercial submissions are declined by insurers. Automated technology available today matches insurers and agents based on appetite for new risks and renewals using a Google-like search. Market search tools increase insurers’ in-appetite submissions and improve an agency’s productivity by reducing time spent on traditional ways of identifying market appetite, such as referencing outdated insurer risk guides, accessing insurer websites, historical agent experience or directly contacting individual underwriters.

See also: Find Your Voice as an Insurance Agent

As key business partners in the insurance lifecycle, agents and insurers depend on one another and, therefore, have a stake in each other’s success. To fully capitalize on this mutualism and fuel growth, agents and insurers must increase their connections.

To further explore how insurer connectivity can drive greater business success, download Applied’s Insurer Connectivity ebook now.