Earlier this month I was fortunate enough to address the annual NAIC Insurance Summit in Kansas City. The focus of my remarks this year was innovation, with a specific callout to what is happening in the InsureTech arena. It was a pleasure to facilitate a keynote discussion with thought leaders from the Plug and Play Accelerator, the Global Insurance Accelerator, Insurance Thought Leadership, and the Hartford InsurTech Hub. These entities operate in different parts of the ecosystem, and representatives from each provided valuable insights on the industry changes they see playing out today.
Obviously, much of the focus is on how technology can be used to create disruptive and transformational changes in an industry that is very resistant to change—in part driven by the desire to effectively manage risk. By its very nature, change introduces risk, which in this case can trigger significant immune system reactions. We discussed a range of organizational, operational, and geographic responses that successful organizations have used to address these issues. Many of the insights gained from these experts mirror the work Novarica has done, including the Innovation Tour we lead twice a year in Silicon Valley.
Another element discussed was the value generated by marrying the enthusiasm and creativity of a startup with the battle-tested expertise of industry mentors who can inject thoughtful pragmatism into a highly regulated world. Insurance’s level of regulation makes it different than many other industries, so proper mentorship arrangements can go a long way toward avoiding the miscalculations and collateral damage that can come from “unguided missiles.” In fact, the combination of talents that may span generations is something smart VC firms in the space look for as a success criteria for investment.
Of course, if all this was easy, everyone would do it—anywhere. That’s clearly not the case. Our panel had some terrific opportunities to discuss the best ways for carriers to engage, the kinds of areas in the value chain to focus on (systems of engagement and analytics top the list), and the value associated with real “test and learn” models. Since failing, fast or otherwise, isn’t part of the approved lexicon at many carriers, this can lead directly back into a meaningful conversation about organizational dynamics and the kind of commitment required at the most senior levels to allow innovation to thrive.
Any discussion in this area ultimately leads to discussions about talent management and the nature of education/training. The importance of continuous learning is being recognized across the board, given the pace of technology advancement as well as notable market and demographic changes being faced by carriers and startups alike.
It is certainly an exciting time in the insurance industry. Some of the opportunities in front of us will require decidedly non-legacy thinking to maximize the benefits to organizations. In fact, the best advice I heard this week came from the airline pilot who said, “Strap in, this is going to get bumpy.” Indeed, it is. But anything else would being boring.
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