Are we on top of product innovation?
In its most basic form, innovation is the creation and execution of a good idea that improves the status quo.
Innovation is not necessarily a new idea (such as an invention) and it does not necessarily need to be prodigious, but it is critical that innovation is executed. The best innovations involve seamless execution of a good idea.
Technological industry requirements
What does innovation mean for the insurance industry? Given the current global risks, climate change, cyber threats and the constantly evolving world we live in, many individuals are asking whether insurance product innovation is taking place and whether the insurance industry is keeping up with market requirements and the advances in technology.
A number of industries have been impacted recently by new technology and disruptive ideas. Uber and Air B&B are prime examples of such innovation in the transport and hospitality industry. These innovations have significantly impacted the manner in which taxis are ordered and hotel accommodation is reserved worldwide.
Given the dynamic technology revolution taking place today, the insurance industry must be cognisant of the technological industry requirements; the fact that policyholders are becoming ever more tech-savvy and demand products which are cutting edge, for example, driverless cars, wearables, internet of things, drones and 3D printing.
Adapting to modern-day risks
The insurance market has already been drastically influenced by the advent of the technological age, the products required to protect modern day insurable interests, the type of policyholder and type of cover required.
Insurers and brokers must be aware of their clients’ needs and ensure that their product offerings meet, and better yet, exceed, their clients’ expectations. Innovative ideas are often anchored in traditional insurance principles; however, they speak to a new generation of risk and also to alternative mechanisms of insuring such risks. Policyholders are not only looking for traditional insurance but, given current technology trends and developments, require modern-day risk cover, for example, Facebook and other social media liability covers.
Promoting and executing innovation
It is clear that it has become imperative for insurers and brokers to foster a culture of innovation within their organisations and that it is essential to inspire (and reward) employees for innovative thinking which may ultimately be to the benefit of the relevant insurer or broker. Employees are a precious asset in the innovation process as they are on the ground, interacting with policyholders and experiencing the day-to-day challenges common to the insurance industry.
Employees are in a unique position to identify gaps and problematic areas in processes and offerings, whether out of frustration, a desire to simplify and improve, or as a time or cost saving measure.
In order to promote innovation, it is essential to:
1. Identify the problem area, potential for improvement, business opportunity and/or gap in the market;
2. Find a solution utilising new technology and market changes (look beyond the status quo and think out of the box); and
3. Execute the innovation.
Execution of innovation is most often successfully achieved by implementation in phases, proto-typing solutions and agile methodologies.
Many innovative ideas are often halted in either the ideation or execution phases due to the fact that most technology platforms do not and will not support new, innovative ideas. As such, it is critical that you have a technology partner that thinks in the same way as you do and constantly strives to improve efficiencies and provide a platform to quickly test and implement innovative ideas, with a quick time to market and the ability to adapt.
In conclusion, it is essential to embrace the constant technological change which underlies the current insurance environment; rising to and overcoming the challenge of technological advancements and becoming pioneers of the insurance industry.
