15 Jan Innovation – quo vadis?
As innovation manager I am often asked, which parameters are relevant for an insurance company to be successful and keep up with the market or even take the lead. Focusing on the customer expectations would come to my mind primarily. But that is too short-sighted. The success of a company depends on many different factors and also on the point of view, because expectations of customers, employees and also board members have changed completely during the last year.
Companies stay relevant, when they manage to combine the best of both worlds – the experience and the stability of the traditional world and the different ways of thinking of the new digital world. In this context “Innovation” is seen as the magical ingredient to make all this happen.
What is necessary is to decide which ideas, which innovative solutions will lead us there? Where do they come from? How do we measure success? There are so many questions around this topic, and I will try to take a look inside the crystal ball to find possible answers…
How to start
Innovation is essential not only to prosper but also to ensure whether a business survives. The right question at the beginning of the innovation process is crucial: “How can I offer my customers a product that satisfies functional and/or emotional requirements in a way that is superior to our competitors?”. Our customers don´t care about our products, they are interested in how to save time and money, superior service and themselves.
Where does innovation come from
Our employees represent a significant source of innovative ideas. Therefore, it is important to create an environment where internal employees are able to explore new ideas. The innovation prescription includes a combination of internal and external input. Finding the right balance is the true challenge but recognizing that they both are important is the first step.
Making good decisions is not easy. There are a few points which we have to consider to be “on the safe side”: Figuring out what is most important is the first step followed by gathering necessary information and weighing the consequences. Finally, the decision is made, but never forget to evaluate the steps. This final point is probably just as important as step one, if not more important, because it will help to further develop the decision-making skills for future problems.
What is success
Success means at least several things to different people. Some may say that the primal objective of innovation must be to create and grow real wealth, others combine it with leadership, sustainable development or social responsibility. No matter what my view or perspective on the meaning of “successful innovation” is, there is little doubt that over the next years, innovation will be the most critical strategic competitive factor in insurance business.
Where is innovation in insurance heading – an outlook
There are several key challenges that the insurance business is facing. But for sure the ones with the highest impact are AI, personalization & data, digitization, blockchain and human capital. AI and machine learning can influence and improve significantly every insurance process e.g. pricing, underwriting, fraud prevention and many more.
Digitization is accelerating fast-paced with new and innovative technologies, the greater use of data and a mobile-first approach not only changing how the industry operates, but also how customers expect it to operate. The age of ecosystems and platforms has already started, traditional borders fall away. The reduction of friction for customers, who want to switch between related services, is a key value. Personalized solutions offered to them through integrated data rounds the picture.
To fulfil the need for cash flow, blockchain solutions may solve the problem with so-called “smart contracts”. Apart from the security benefits, these contracts provide automate agreements with self-executed guaranteed outcomes if certain preconditions are met.
Last but definitely not least, insurtechs like viesure can provide added value to traditional insurers when it comes to human capital. To be honest – working for an insurance company is not really sexy for talented and experienced candidates. Therefore, the creation of a workspace in a dynamic and innovative surrounding apart from the boundaries of the existing industry solves the problem. The prospect of being part of innovative technologies influences employee attraction and retention – and happy staff leads to happy customers and successful business for the insurer.