Is the regular complaint that insurers lack innovative competence a fair one? The darling of the insurtech field, Lemonade, certainly believes so. It is one thing to say that from a blank digital sheet, loads of funding and a simple single product offer to a limited geographic market. Incumbents have wide product portfolios wide, often global, geographic coverage.
There are shining examples of digital transformation at incumbent insurers but a worrying failure to do this at scale across those portfolios and global coverage. A pinch of travel insurance there and dash of property rental there.
Where is the digital transformation across Motor and Home, Travel and Pets, Employee Benefits and Speciality delivering a similarly consistent and delightful customer UX and journey?
Dan White talks of the four dichotomies that get in the way.
- Commerciality v Learnings
- Funding v Scarcity
- Creativity v Discipline
- Permission v Forgiveness
Commercialism v Learnings
Talking about a new initiative Dan White quotes the FTSE 100 CFO saying " innovation schminnovation – show me the money!" before releasing any. Best way to stymie innovation.
A laser focus on the customer will show the gap between what they expect and will buy from what they get from you today. What got you here today will not get you there tomorrow.
Build new customer journeys from buying through making a claim and getting satisfaction to renewing/amending.
Rapid build, test and learn, iterate and improve to achieve competitive differentiation and the ultimate ROI invisible at the start.
That requires an agile digital platform that is a catalyst for iterative development.
Funding v Scarcity
The sheer volume of funding fueling will largely be wasted on solutions seeking a problem. Scarcity of funding should ensure that development and focused on customer problems and discontent. Once a problem is solved funding is required to scale and deploy
A digital platform with a revenue cost commercial model is vital to allow that. Gone are the days of large up-front capital investment
Creativity v Discipline
Innovation is not just creativity- it is solving real problems. As Dan says "Creativity has to be disciplined. Think, for instance, of the power of focusing ideation on prioritised problem statements, versus scatter-gun ‘throw it at the wall and see what sticks’ approaches."
Customer journey building must be in the hands of the business using low-code or no-code configuration tools that combine front-line expertise and customer focus with rapid build/test/iterate sprints. Days and weeks not months and years. Fast, disciplined creativity that can be taken to market fast.
Permission v Forgiveness
"Which do you tend to seek? Which is the right path to choose? In an industry that is risk-averse and – too often – legacy-minded, have innovators like you, and I got no choice but to seek forgiveness for breaking the rules?" Dan White
Vital to achieve that is, again, a digital insurance platform that takes an innovative idea to a deployable solution via fast build/test/iterate process.
Then the CFO and CEO will see the " innovation schminnovation", and release more funding to scale up innovation and leave Lemonade gasping as the bubbles in its glass go flat.
All insurance innovators struggle with a number of common challenges. I see this first-hand time and time again. Whether on projects or in conversations with people trying to change insurance for the better. One FTSE 100 insurance CEO recently said to me “innovation schminnovation – show me the money”. There are sceptics, then. Who’d have thought it? I see four recurring dichotomies that lie behind this type of view, and that underpin the common struggles that insurance innovators face: Commerciality versus learnings; Funding versus scarcity; Creativity versus discipline; Permission versus forgiveness. Let me share them here.