Innovation For Insurance: What Are The 3 Topics That Insurers Want To Innovate Their Business?
Today, there are lots of insurers that are talking about innovation, but not every insurer means the same thing when they use the term. You can have three people sitting around a table to discuss innovation, and it turns out all three of them expected an entirely different conversation. This is a good thing rather than a problem! It means there are many ways for an insurance company to be innovative in today’s market.
There are three primary topics insurers want to explore in the realm of innovation:
- Internal innovation best practices
- Emerging tech
- Insurtech startups
Internal Innovation Best Practices are the ways that insurers themselves can become more innovative companies or build more innovative teams. This covers approaches like fail-fast projects, MVP and agile delivery, “two-pizza teams,” top-down cultural support, and talent acquisition.
Emerging Technology conversations focus on the tech itself. What’s happening with AI/ML, NLP, IoT, RPA, drones, blockchain, machine vision, and lots of other acronyms and new technologies. Insurers want to understand these emerging spaces, dive into the use cases for application at their organizations, and figure out which ones apply to them. No insurer can invest in all emerging technologies at once, but keeping an eye on all of them is key.
Insurtech Startups represent an exciting new arm of the insurance industry, fueled by entrepreneurs, outside investment, an eye toward customer-driven disruption, and insurers looking for new ways to approach the market. Insurers want to learn from startups, partner with them, license their tech, invest in them, and — in some cases — position against them.
All of these areas represent innovation, and insurers should be discussing all three. While all of these areas overlap, they are very different, require different stakeholders, and have different outcomes.
Internal innovation best practices can allow an insurer to better explore emerging technologies, but exploration should not be limited to newer tech. Many of the most successful internal innovation programs are building better digital experiences for web portals and mobile apps, neither of which have been “emerging” for a couple of decades. Good internal innovation best practices help insurers partner with startups as well as build some of the startups’ default approaches at their own organization to compete with those smaller companies.
Emerging technology is key to many innovation projects. Leveraging AI or NLP or another new tech can feel like the destination of every innovation conversation — these capabilities should be part of any innovation discussion. Learning about these technologies and building internal skill sets, however, does not require a broad internal innovation best practice approach. For an insurer it might mean upskilling, hiring in-house talent, or monitoring. It might mean hiring an IT services partner. It might mean licensing a platform from a startup partner with an emerging tech offering. It might just mean “keeping an eye” on these technologies to see what other insurers are doing with them.
Insurtech startups usually leverage innovation best practices and often leverage emerging technologies. But not always! Many startups in the space are using traditional technologies and approaches while looking for new markets, new products, and new business models. Unlike how the media portrays this exploding space, insurtech startups are a good reminder that innovation isn’t just about technology!
If there’s a good meta-level best practice, it’s to agree before going into a conversation about innovation exactly what “innovation” means to the people in the room.
Inmediate is an insurtech startup from Singapore that is using the latest technology such as Artificial intelligence, Distributed Ledger, and NLP, making insurance processing and underwriting fast, cheap, and flexible. That gives for better processes, lower costs, improved time to market, and new revenue opportunities.