Managing Innovation in Insurance

Report Summary

Managing Innovation in Insurance

Robert McIsaac
Head of Life Insurance, Annuities, & Benefits

April 2017 - Enabling innovation is a high priority for insurers, as customer expectations continue to be set by other industries and new entrants stand to disrupt existing business models. However, innovation initiatives are still at an early stage for most insurers.

This report examines the approaches that insurers are taking to drive innovation, how widespread they are, and how insurers are judging the
results.

Key Points and Findings

  • More than 40% of large insurers are expanding their innovation programs and venture investing activities. Smaller insurers are less active, constrained by resources and—in many cases—culture.
  • ROI metrics are not widely used. Hard ROI is not the primary measure of success. Gains such as exposure to innovative technology and business processes for eventual operationalization seem to be the primary goals of most companies’ innovation programs and investments.
  • P/C insurers tend to have better-developed innovation initiatives. Greater competition, a faster-moving market, and more obvious applications of new technologies are driving more aggressive experimentation in P/C than in L/A.

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