Innovation Acceleration Becomes Advisory Board Focus

Novarica recently hosted a meeting of our Innovation Advisory Board. Insurers across the country joined us to share their experiences fostering innovation during the pandemic and beyond. The discussion produced some fascinating insights and an illuminating conversation around how insurers are approaching innovation.

Meeting Startups Halfway and Vice Versa

Insurers and InsureTechs are used to operating at different speeds. Most insurers have implemented an extensive contracting process to manage established and frequently large enterprise vendors. Startups, conversely, often operate with limited funding and resources. One startup mentioned that it could take 40 meetings and 18 months to get a deal done, which is a strain for a company that may only have 12 months of cash.

The onboarding process for startups may need to move more quickly and account for the limited resources that a small company has. Insurers can’t compromise in areas like compliance and security, but selecting a use case or pilot with minimal organizational impact may be one way to fast-track startups. One insurer noted, “If we keep behaving like the dinosaur, we’re going to limit our ability to be transformational.”

A Different View of Success and Failure

Jeff Bezos famously stated that “failure and innovation are inseparable twins.” Many insurers are working towards more innovative organizational cultures, embracing experimentation and failure. At the same time, established insurers have built up corporate immune systems meant to protect operational and financial stability from perceived threats that could come with efforts to do things in new and different ways.

These “immune responses” have served insurers in the past, but enabling a more innovative culture can mean redefining failure and the organization’s relationship with risk aversion. One insurer suggested that “not trying is failure.” Another discussed the importance of “not conceding to bureaucracy and maintaining velocity and speed” in fostering innovation.

Innovation Exposure and Cross-Pollination

Silicon Valley has historically been a central innovation hub in the US and globally. Innovation ecosystems have also spun up in East coast cities like Hartford, New York, and the Midwest’s Silicon Prairie in areas like Des Moines.

Insurers looking to adopt more innovative practices may find it tremendously helpful to visit these hubs. Startups, incubators, and accelerators can expose insurers to innovative practices that they can eventually bring back to their operations. Similarly, maintaining a presence in these innovation centers gives insurers insight and influence, and they can help startups understand how to serve the industry better.

We’re looking forward to continuing the conversation next month. Feel free to reach out to me  if you’re interested in discussing innovation. Also, see our upcoming Innovation Tours in Silicon Valley, which will be picking back up in January 2022.

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