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Innovation Pivots: 10 Lessons Learned

Some of the best innovation success stories are built out of the lessons learned from watching the attempts of others as they either falter or flourish. The following is a compilation of what we believe are the best practices for innovation, through anecdotal and use case examples.

In an effort to help and inspire insurers along the innovation journey, SMA has grouped the 10 innovation best practices into three phases and then defined each of the 10 best practices.

See also: Innovation: ‘Where Do We Start?’  

Top 10 Best Practices for Innovation

Phase 1: Getting Started: Begin the Innovation Journey

  1. Don’t Be a Lone Wolf
  2. Institutionalize Innovation
  3. Reframe Business Strategies and Plans
  4. Explore the Insurtech Landscape

Phase 2: Gaining Momentum: Learn From Successes and Failures

  1.  Have a Champion for Each Cause
  2. Pivot, and Then Pivot Again
  3. Expand Your Failure Appetite

Phase 3:  Creating Advantage: Leverage Innovation for the Competitive Edge

  1. Leverage Customer Insights
  2. Innovate Across the Enterprise
  3. Make Innovation Continuous

Key to Digitizing Customer Experience

Every aspect of the way we interact with goods and service providers is becoming digitized, but it doesn’t work to go partway. As insurers, we have to ask ourselves, “What does a complete digital experience for our customers and policyholders look like?”

In my travels over the last year, I have run into experiences with very large companies and enterprises that have excelled in customer service in the past, but today are falling short in the new digital experience realm. I’ll share some examples, and, insurers, lend an ear. There are valuable lessons to be learned here!

Earlier this year, I took my family to Disneyland. Disney, of course, is a leader in customer experience as well as digital transformation. Disney has gone out of its way to improve a customer’s access to park information. The company has digitized the ride process with fast pass and even offer a suite of apps to improve the customer experience. What I experienced though, in my view, was a fundamental failure to plan a digitally transformed end-to-end experience.

See also: Today’s Digital Customer: It’s Me  

Most people buy their Disney passes on-line. That’s great! That’s fast and easy. But the park entry process is still highly manual. Season pass holders are mixed in with day pass holders; check-in agents manually process the passes, check IDs and passports and take photos for multi-day pass holders. Meanwhile, day pass holders wait in a line of thousands of people all corralled into 20 lines, 100 people deep. This results in confusion, frustration and many children having meltdowns in the hot California sun. It took our family 45 minutes just to walk into the park.

The point is, digitization is great, but you have to think of the holistic experience – everything from buying a pass to getting customers into the park with an easy check in to getting them out again, and everything in between. Disney is one of the best, but even Disney can fall short. The reason is because digitization changes not only the front-end buying experience but the back-end processes, as well. Disney has access to immense amounts of data, including online ticket sales, and has the power to predict wait times and improve service at check in. The lesson here? When creating a digital experience, use all the tools available to you and don’t forget about the nuances of the experience. #disneyland

Of course, I have had some great and pleasantly surprising digital experiences over the last year, too. I took a ski trip and got to experience the Vail Resorts Epic Day Pass. Ski lift tickets have been replaced with RFID-enabled cards that are read without having to wait in line to be scanned. These Epic Day passes also synch to the Epic Mix app, which tracks your runs and your day on the mountain from a number of scanners placed on the lifts and throughout the mountain. The Epic Day pass also can load your credit card for use all over the mountain, so no need to carry a wallet. This is a great example of innovation and digitization with pure customer experience in mind from start to finish.

Just as surprising is what my daughter recently told me about the new online application to sign up my grandkids for swim lessons in her tiny New Hampshire town. Gone are the days of phone calls and paper applications. She says that, because of the online application, registrations are the highest ever!

Now, back to insurance. Did I mention that we recently renewed our professional liability policy? Every year, we are required to make a formal submission. Our agent was on top of it this year, we renewed early, and we actually received our quote and policy – all electronically! And then this happened: I just received a paper letter informing me that the expiring policy is not being renewed! Old, irrelevant and confusing. This automated paper form letter is disconnected with the renewal process and status. Unfortunately, there are still many cases like this happening in insurance.

See also: Customers’ Digital Expectations

These are just some thoughts from my travels about getting digitization right or missing the mark when it comes to the end-to-end customer experience. But insurers, take note: It is important to look at what outside companies are doing to see how they are digitizing their customer experience. If a tiny New Hampshire town can do it for preschool swim lessons, there is no reason insurers can’t make some significant steps to go digital.

Yes, Personalize — but Get it Right!

“Hello, undefined: How are you?”

We’ve all seen bad marketing emails where what was supposed to be a personalized greeting or communication goes terribly wrong. These failed attempts at personalizing the customer experience have the exact opposite effect that they are supposed to when the data is bad. It would be better to go back to the rules we use in face-to-face communications: If you can’t remember someone’s name, better not mention it at all.

The same high standards apply to marketing principles in the insurance world when you aim to personalize interactions with policyholders. You have to get it right. Today, customer expectations are at an all-time high. Personalized experience is a key differentiator that sets insurers apart, but they really only have one shot to get it right. One slip-up can spell disaster for customer loyalty and brand reputation.

See also: How the Customer Experience Is Shifting  

Recently, I got my renewal package for my homeowner’s policy from a large insurer. In big bold typeface, I was greeted with, “Thank you for being our customer since 1989.” Okay … but I have had a homeowner’s policy with this insurer since 1980!

In 1989, we sold our first home and bought a second home. So, I can understand a different location or possibly a different policy number, but I am still the same customer! I got fixated on how the company could be wrong. It is clear that insurers manage customers by line of business or a policy number in a policy admin system, not by customer data. Then, I started to examine the entire renewal package, and the company was adding new benefits and coverages in simple language – those were positives. But I could not get past the front page. The overall quality of the renewal document was marred by the flawed opening.

So, to insurers, regardless of your size, if you want to personalize, you’d better get it right. Never assume personalized, exported data is correct. You must be sure of it. In my case, a simple tweaking would have been all that was necessary to rephrase the statement, “Thank you for being a customer at this address since 1989.”

As a customer, I expect more. As insurers, we should demand more, provide more and ensure that personalized data is right. Otherwise, you look sloppy, and the veil into your organization (or lack of organization) is lifted. Don’t be another bad data story, and don’t make your customers feel undefined when they interact with you.

See also: 5 Key Customer Experience Trends  

After all, first impressions still count, big-time. Customer loyalty can change as quickly as you can say, “Hello, undefined…”

8 Exemplars of Insurtech Innovation

The winners of the SMA Innovation in Action Awards are Figo Pet Insurance, Meteo Protect, Motorists Insurance Group and Texas Mutual Insurance, among insurers, and Baseline Telematics, Life.io, Octo Telematics and Pristine, among service providers.

SMA launched this awards program five years ago to recognize projects and solutions that have reshaped one or more of the foundational areas for the Next-Gen Insurer: business model, customer, innovative culture and technology and data.

See also: Innovation — or Just Innovative Thinking?  

The insurer winners of 2016 SMA Innovation in Action Awards, in alphabetical order, are:

  • Figo Pet Insurance, for its unique approach to the pet insurance business model through the innovative use of emerging technologies. The proprietary Pet Cloud platform offers policyholders real-time pet GPS tracking, cloud storage for medical records, mobile claims filing, social pet profiles, a pet-friendly business locator, texts and alerts for coming shots and appointments. Figo’s reimagination of the pet insurance value proposition is focused on making life easier for people and their pets. Figo’s holistic approach offers a meaningful example of how the insurance industry can reinvent its business models and customer engagement strategies for the digital world.
  • Meteo Protect, for offering customized, data-driven agricultural insurance for weather-related risks. Customers can choose each parameter of their weather policies, including crop, period of coverage, specific weather event and intensity and payment amount. Meteo Protect’s Vivaldi platform aggregates huge volumes of weather-related data from 40 years of climate history; current readings from satellites, sensors, gauges and other global weather data sources; and commodity prices and crop yields. Meteo Protect’s focus on the changing nature of weather risks and emphasis on the uncertain future expands the possibilities for the personalization of insurance products and services.
  • Motorists Insurance Group, for creating an innovation space as part of the cultural shift necessary for its 10-year vision of organizational transformation. This vision hinges on Motorists’ reinvention as an “85-year-old startup” designed for innovation and collaboration. The Intersection, the company’s new collaboration space, represents a complete redesign of a 1940s space to prioritize natural light, bright colors and transparency. It facilitates global collaboration through the use of cutting-edge technology, enabling work to shift seamlessly across time zones and continents. Motorists demonstrates that no company is ever too established to change, and that vast and intangible changes like developing an innovative culture can start small and still have a big impact.
  • Texas Mutual Insurance, for “Safety in a Box,” a groundbreaking virtual-reality app designed to teach construction workers the value of following safety procedures. The app is available for download to a user’s phone, which can be inserted into a Google Cardboard virtual-reality viewer for an interactive, 360-degree viewing experience in English or Spanish. The user can experience the four most dangerous construction site accidents, including a collapsing trench, and see how safety choices determine the outcome of each scenario. Texas Mutual is distributing the boxes for free at construction industry events to promote workplace safety and reinvent the company’s role as a workers’ comp insurer.

A compendium of case studies detailing the success stories of the four winners and the 16 other insurers that participated in the SMA Innovation in Action Awards program is available here.

The solution provider winners of 2016 SMA Innovation in Action Awards, in alphabetical order, are:

  • Baseline Telematics, for its BaseDrive telematics solution, which leverages a mobile app and in-car Bluetooth dongle to give insurers everything they need to create their own usage-based insurance (UBI) programs.
  • Life.io, for its policyholder engagement platform for physical, emotional and financial health, which uses behavioral economics, predictive analytics and personalized content to drive high levels of sustained policyholder engagement and the achievement of personal goals.
  • Octo Telematics, for its telematics offerings that deliver behavioral, contextual and driving analytics, enabling insurers to provide value-added services for policyholders such as UBI pricing, loyalty programs, vehicle diagnostics, location-based services, mobile connections and more.
  • Pristine, for Pristine Eyesight, a video communication platform for smart glasses (e.g., Google Glass) and mobile devices that enables long-distance collaboration between field professionals via real-time audio and video connection.

A collection of case studies profiling the four solution provider winners, with details on the rest of the 27 solution provider awards submissions, will be released in early October.

See also: Insurance Innovation: No Longer Oxymoron  

Bridging From Today to Tomorrow, Part 2

In part one of this blog, we looked at the transformational changes insurers are facing and the need to build bridges between today’s world and the future. Now it’s time to look at “the hows” – How do you respond? … How do you set a call to build those bridges? … And how do you stay competitive in this new world?

SMA recommends that insurers plan to bridge to the future, building in capabilities that will achieve near-term goals for improvement, while moving toward a Next-Gen Insurer model. The following seven suggestions should be part of your bridging strategy:

Operationalize customer-centric strategies: Improving the customer experience has been the top strategic initiative for insurers in 2015 and 2016 and is sure to remain critical in the years to come. Emerging technologies and the increasingly connected world have a large impact on customer needs, behaviors and expectations. More than ever in this fast-moving age, listening to the customer and creating a customer-centric business will be key.

Modernize core platforms: Technology systems for rating, policy administration, billing and claims are the hub of every insurance company. Many a company has discovered that legacy systems in these areas stand in the way of implementing new business strategies and seizing market opportunities. Modernizing those core platforms is a great place to start in the quest to become a Next-Gen Insurer and position for a changing world.

See also: 4 Technology Trends to Watch for

Build a flexible organization and workforce: Technology and process don’t improve by themselves. New business models, new ideas and ways to capitalize on emerging trends and technologies come from an organization and the people who are able to change. Culture, organizational structure, new roles and agile technology infrastructures are required as part of a comprehensive strategy to build an organization that can quickly and willingly respond to changes in the environment.

Major in data and analytics: Every insurer needs to create an enterprise strategy to leverage their internal data assets and capitalize on more external data in the marketplace. At a minimum, the strategy should start with master data management and include a strong business intelligence foundation. Building skills and capabilities for more advanced analytics and big data should be on the road map, as well.

Institutionalize innovation: Innovation is not a passing fad. The creative rethinking of the business is a requirement for success in a world that is transforming. But institutionalizing innovation means going beyond thinking or imagining new ways to do business and extends into operationalizing those ideas.

Go digital: Most insurers have been on a digital journey for a long time, but in many cases it has been on a department-by-department, project-by-project basis. Now is the time to create a more comprehensive strategy to improve digital operations across all aspects of the business. There may still be a long way to go on this journey, but it is important to have an overarching strategy and framework.

Keep your finger on the pulse of the emerging trends and technologies: Not all emerging technologies will require the attention of every insurer. But each insurer should identify those with the most potential impact for their own company; develop a plan to monitor them; and invest, experiment and incorporate elements into the strategy over time.

SMA has created a Next-Gen Insurer framework that brings together all of these elements into a common vision to aid insurers as they prepare for future success. This framework has innovation at its core and includes four related elements:

  1. Creating a strategic plan that starts with customers
  2. Establishing capabilities to develop innovative products and services
  3. Adapting and capitalizing on technologies and data
  4. Implementing new and revised business models.

As insurers consider the impact of emerging technologies for their companies, the SMA Next-Gen Insurer Model helps in planning how to bridge from today’s business to the insurance business of tomorrow.

See also: Next-Gen Analytics Drive Efficiency

Bridging is so important to insurers today that is a major theme of the SMA Summit this September. Insurers recognize that timing is critical, and the exponential changes taking place now in technology will only increase. Finding ways to build those bridges between today and tomorrow is paramount.

Change is here, and it’s not going away. Now is the time for insurers to prepare and execute plans to ensure their company’s future.