Innovation has transitioned from novelty to competency at many insurers, and organizations continue to look for ways to bring more innovative practices into everyday use. I recently had the opportunity to facilitate our most recent meeting of Aite-Novarica’s Innovation Advisory Board, an insurer knowledge-sharing community that discusses innovation trends and practices.
This month, enabling and organizing for innovation were top of mind for insurers. Some of the key discussion topics that emerged included:
“It’s All About Culture”
As one insurer noted, innovation is “all about culture.” Innovation succeeds when it is woven into the fabric and culture of an organization; this is something that insurers have taken note of. Innovative cultures seem to be replacing the desire to outsource innovation to insuretech startups in some cases. Startup partnerships are still of interest, but insurers are increasingly equipping their own organizations with the tools to ideate in-house.
A valuable way to bring more innovation in-house can come from letting outsiders inside. This may not seem intuitive to most insurance organizations, whose corporate “immune systems” are often built to keep out anything new, good or bad. Yet an external party can provide valuable insight. One insurer discussed their experience “going rogue” and hiring an outside design firm to rethink user experience.
The insurer’s mandate was to create an app that was intuitive enough to be used without training or consulting documentation. The insurer intentionally sought out a design agency with zero insurance experience to provide fresh perspective and ask questions that people steeped in the industry may not have thought to consider. The result was a portal platform that the insurer continues to use.
Collaborating to Avoid Fatigue
Insurer CIOs and innovation leaders are often relationship managers as much as they are heads of technology. This dual skill set is necessary in garnering support for new initiatives, and it often means seeking input from the business. Fostering alignment between business and IT is a well-worn path at many insurers, but its importance comes into particular focus with enabling and planning for innovation.
Input from business is critical for ensuring that a new technology or initiative addresses an airtight problem. Implementing an initiative for the sake of trying something new runs the risk of creating innovation fatigue, or perhaps worse, becoming an example of “Innovation Theater.” Innovation needs to lead to a value-added outcome, and staff may be turned off if ideas aren’t in a place to be executed on.
Building the Innovation Organization
Insurers are approaching innovation more proactively, and many have implemented digital platforms to capture ideas and create a pipeline of initiatives to solve problems that “keep people up at night.” Crowdsourcing, though not appropriate for every situation, can be a powerful tool in aggregating expertise and insight broadly across an enterprise. Yet as one insurer noted, these platforms are just tools; process and governance are necessary to push innovation into the cultural fabric of an organization. Insurers consistently noted the importance of sticking to a problem statement, ensuring resource availability up front, and making sure that the business has a say.
These discussions always provide illuminating insights, and we look forward to meeting each quarter. As travel resumes, we will also be returning to Silicon Valley with insurers to learn from some of the most innovative organizations in the world. Don’t hesitate to reach out if you’re interested in an upcoming Silicon Valley Innovation Tour, which will be taking place from June 20-23, 2022. Details can be found here.
In addition, this topic has proven so engaging that ANG will be publishing a research brief titled “Insuretech Innovation Lessons Learned” by myself and my colleague John Keddy later this quarter.
Feel free to reach out to me at [email protected] or to John at [email protected] to discuss more.