After a year that tested insurers’ flexibility, agility, and creativity, innovation is top of mind more than ever. Innovation allows carriers to stay competitive, grow market share, meet evolving policyholder needs, and improve internal processes. Tactical, strategic, exploratory, and experimental innovation all promise to improve different aspects of any business. While innovation is a goal shared broadly across insurers of all sizes, successful execution of innovation initiatives can be a challenge.
Last week, I hosted the 14th Virtual Meeting of the Novarica Women’s Network on the topic of driving innovation in insurance. Our panelists, Amerisure Insurance VP Laurie Pierman, Shelter Insurance Companies Manager Amanda Martin, and Penn National Insurance CIO and VP Britta Schatz, discussed key challenges and best practices for driving innovation in insurance. I’ve included some highlights below:
Innovation is about applying novel solutions to proven problems, and there are many ways to identify and follow through on opportunities for innovation.
Fostering enterprise-wide engagement with innovation ideation and project proposals has led to strong results. Having a dedicated innovation team or program can go a long way toward both sourcing and further developing creative, disruptive ideas. Innovation teams start small, at just three to four people pushing for change. Two panelists had dedicated resources on their innovation programs, while one panelist spoke about her company’s defined innovation program; though her company does not dedicate any resources specifically to innovation, company leadership treats innovation as a shared responsibility and keeps the program open to contributions from all employees.
When it comes to the identification of opportunities for innovation, one panelist shared the details of her company’s multi-stage innovative process. Stage 0, the awareness stage, involves inviting speakers to talk about a new technology or product. Stage 1 covers research—a small team may set aside time to look into the applications of a certain new technology, reach out to vendors, or consult with analysts or advisors on the topic. Stage 2, the proof of concept step, involves testing a new technology and may include exploration of specific business use cases. Stage 3, the pilot stage, involves rollout to a small number of users. Only at Stage 3 does the company commit to putting money behind a specific innovative product or technology. At Stage 4, IT and business teams work together to roll out the new product to a larger user base.
Another panelist shared a similar approach—a dedicated innovation team, consisting of four members, works together to scout out new technologies and products, consult with SMEs, experiment with said new technology, and implement the technology.
Working with InsureTechs comes with both opportunities and challenges.
One panelist highlighted the importance of the pilot phase. During this initial period, the carrier and vendor are still getting to know each other, and it can sometimes be difficult to find a middle ground for expectations versus real capabilities. Giving an InsureTech honest (and at times, critical) feedback early can prevent misunderstandings and wasted effort down the road, and it will ultimately go a long way toward establishing a strong and successful partnership.
Another panelist made a case for loose integrations with vendor products; loose integrations allow for faster and more nimble changes should business priorities shift during or after initial product rollout. As insurers continue working closely with software platform providers, having a strong and agile integration hub becomes more and more vital for this very reason.
The next Novarica Women’s Network Virtual Meeting will take place on June 30, 2021 at 11AM ET on the topic of “Perspectives From Emerging Leaders.” Speakers include Novarica’s Vice President of Research and Consulting Deb Zawisza and Lead Associate Tiffany Wang. More information is available at here.
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