For "culture to eat strategy for breakfast" it has to be a constraint rather than a catalyst. No one can deny that Elon Musk disrupts competitors and SpaceX has beaten both Amazon's Jeff Bezos with Blue Origin and the entrepreneur Richard Branson's Virgin Galactic. The Musk culture leads to world beating strategies.

SpaceX is the "Go To" for NASA having delivered a disruptive commercial model together with building on the technology that NASA has delivered earlier.

"For good measure, Musk’s company is now pursuing another time-tested Silicon Valley plan with the launch of its own broadband satellite service, Starlink. This echoes a strategy used by Microsoft to dominate PC software, and Apple to cash in on its iPhone. First, build a dominant new tech platform (a low-cost way to get to space), then create the “killer apps” that the new platform makes possible (the space-borne broadband network)."

Richard Waters FT May 7th 2021

Therein lies a conundrum for digital transformation and innovation leaders in the insurance sector. What killer apps is Musk planning for insurance? 

 As risky, long-range technology bets go, they do not come much riskier or longer range than space exploration. The term “moonshots” is applied to other grandiose tech projects for a reason.   But the mystique around space obscures what are often very mundane reasons for success and failure and these are common whether talking about space exploration of insurance.

To read many articles, blogs and announcements about transformation and digitilisation by insurtechs and insurers is often to get the impression that AI, RPA, machine and deep learning and automation  are the keys to innovation.

Musk has more than a fair share of these technologies and arguable the most complete and valuable databank for autonomous vehicles of any auto OEM or software vendor. he global Tesla fleet with its autopilot has driven more miles on more continents than any other vehicle fleet. Even so one senses that Musk has a firmer grip on strategy and the future of driving, fleets, ride-share and robotaxis than anyone.

"The biggest disruptor to insurance today however is: Tesla. You go online, buy a Tesla and click to add insurance while buying the car. No more clunky comparison websites when you get home. Given the car knows how you drive, Tesla can easily give discounts for activating auto-pilot or penalties for driving too close to the car in front. The biggest disruption will happen tomorrow when self-driving cars make insuring the driver irrelevant."

Maarten Ectors in The Future of Insurance May 6th 2021

Ectors looks at the world both as an entrepreneur, technology visionary and, until recently, a Chief Innovation Officer at L&G who deployed transformational insurance innovations. He observes how common it is for incumbents to dismiss new entrants to the market whether it is Lemonade in insurance or Tesla with EVs.

"However ask any insurance expert and they will bring up the limitations of Lemonade and the fact they are not running a profit. This is similar to the Nokia experts I would talk to a decade ago who would point out that the first iPhone did not have 3G, or telecom operators who would say Facebook was never going to make money [afterwards they bought WhatsApp and disrupted the voice and messaging market],… These experts do not understand that VCs will pour in lots of money if your solution is having a positive network effect and customers really want it. Lemonade beats all insurers in market fit and speed and because their costs to build a fully automated backend can be shared over more customers over time, there is a positive network effect and profits on the horizon.."     

That is why it is so important to have a viable strategy for this year, next year, five year's time and beyond. A strategy that is not just about automation, driving out cost, improving customer experience or leveraging no-code/low-code platforms. Important though those are they are just improving what you do today not addressing the future of insurance.

Why not talk about the issues with Maarten and me? - just drop us a message via Linked In. We are already involved with some big insurers which understand the challenges and risks highlighted above.