Netflix is often cited as a successful disruptor which is why Harvard Business Review's list of the top 20 business transformations (from the whole S&P 500 and Forbes Global 2000) caught my eye. Netflix is #1 but NO INSURER features there!
Link the lack of insurers to a recent article in The Economist "The future of insurance is happening without insurance firms".
Despite increased take-up by rising middle classes in emerging markets, global premiums grew in real terms by only 1.3% annually over the period, to $5.2trn. The world economy managed twice that."
The Economist June 19th, 2019
Is lack of innovation a reason?
The Economist goes on to state: - "No insurer ranks among the world’s top 1,000 public companies by amount invested in research and development. Insurers allocate an average of 3.6% of their revenue to computing technology—about half the share that is typical for banks. In a study of 500 innovation topics across 250 firms Ninety, a consultancy, finds that many insurers are working on the same narrow set of ideas. Some of the noisiest, such as blockchain, are the least productive."
This is backed up by the InsuranceNexus "Connected Claims Report 2019". which identifies that investment is insufficient to effect connected claims transformation. The report goes on.. "Understanding of connected claims value is not matched by investment plans".
As claims is the main point of engagement between a carrier and its customers this suggests a serious innovation gap which may explain that global premiums growth is just half that of the world economy. Where there is a proven "protection gap" (i.e. insufficient insurance coverage) that is worrying for carriers.
The Economist describes re-insurers like Munich Re ready to tackle this gap and there is always the ever present threat of tech giants like Amazon filling the void.
If insurer's products and services are losing touch with 21st-century life they need to look at product development. That suggests that rather than trying to re-invent the digital claims wheel they should avail themselves of competent digital platforms like Snapsheet, RightIndem or 360Siteview.
Insist on a No Code platform which means you, the insurer, can create IPR in customised digital workflows and processes designed form the policy holder backwards. Without having to spend millions on consultants and developers. Nor months but rather weeks.
What good is rapidly developing and testing innovative ideas for product and services if you cannot deploy hem as fast?
Agile innovation plus continuous iteration can deliver reduced costs of claims, higher customer satisfaction and more efficient/happier claims teams freeing up time, resources and money to focus on product innovation. There are numerous case studies of digital claims being deployed in 60 to ninety days (can be even sooner but RFPs and procurement processes are normally the hurdle to climb). That is why it is refreshing to meet Chief Innovation Officers like Maarten Ectors at L&G that consign RFPs to the analogue dustbin. Maarten thrives on iterative development and constant innovation focussed on the customer and not the insurer's back-end constraints.
I have attended workshops run by Ninety Consulting which has a pedigree of delivering "insurance ideas to market in 60 days". How about combining the ideas and deploying them in that time frame?
That would deliver the innovation that The Economist sees as missing amongst many of the world's insurers. Are you prepared to be a true innovator? Go for it and chose the best technology partner!
Our initial phase of research identified 52 companies making substantial progress towards transformation—merely 3% of the public companies in our data set. From this second-round list, an Innosight partner panel voted to narrow it down to 27 finalists. For the third round, the Transformation 20 winners were selected by a panel of management experts (see the full methodology and list of judges below). The 2019 list includes 20 firms versus 10 for our previous rankings, in 2017. The immediate reason for the bigger list is that the judges’ scores were extremely close, as all 20 of these firms have achieved compelling results. But the wider reason may be that awareness of transformation itself seems to be widening, with more and more companies recognizing the urgency of the challenge as well as what a profound shift these efforts represent.
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