“Innovation is all about identifying and filling people’s unmet needs. Customers want products and services that can solve their problems better, faster, or more cheaply than existing offerings can. But even innovators and organisations renowned for their scanning capabilities often have trouble perceiving and correctly interpreting those needs”

Jean-Louis Barsoux, Michael Wade and Cyril Bouquet in Harvard Business Review July-Aug 2022

Scanning the ranks of incumbent insurance carriers and brokers that often seems to be the case. There is much talk of UBI and Embedded Insurance but Progressive started leveraging telematics over twenty years ago and embedded insurance is often a fancy name for affinity marketing. I do not intend to understate the importance of mitigating bad driving behaviour through telematics-based nudging and rewards. Nor the convenience of being able to obtain cover at the point of sale with true embedded insurance. These are important evolutionary advances.

But which carrier analysing flood damage to commercial properties came up with practical parametric insurance that delivers cash immediately rising waters hit certain levels? Or allow the customer to judge the trade-off between premiums and cover to suit budgets and risk? That’s the gap FloodFlash covers.

Which carrier recognised that many people only want to cover a few items, say 5, on contents insurance and be able to be flexible in changing those and paying monthly? Arma Karma spotted that opportunity.

What about Mobility Services? Most carriers offer annual cover for vehicles bought or leased, some have multi-vehicle offers and many have introduced rewards and discounts for drivers who voluntarily allow driving behaviour to be analysed via telematics. But what about the growing number of people who decide they only want to drive now and then and buying or renting a car that just sits on the drive or in the garage is a waste of time.

These unmet needs are generally being met by new entrants to the market like By Miles, Flock, ZEGO and Cuvva but there are some innovative carriers like Baloise that are in the forefront of innovation across a wide range of mobility services.

I attended a presentation to investors, bankers, insurers and insurtechs by Patrick Wirth, VP Ecosystems Mobility Baloise who kindly gave me permission to publish these slides from the conference. The first thing that struck me was the customer backwards rather than insurer-centric view of the world. Patrick's team looked at customer needs and behaviour and the trend towards mobility as a service rather than the predominance of owning or leasing vehicles. Baloise builds, invests in, acquires, and supports companies delivering the wide range of mobility services that consumers want and embeds insurance in each mobility service; cover, claims and service. Beyond just embedded and subscribed insurance. 

Wirth gave his own opinion on meeting unmet needs.

“Baloise innovation strategy follows the belief in a connected society and economy and similarly in a connected mobility service network. We engage young companies and partners in the mobility ecosystem in a strong network, bringing people, assets, ideas, technologies, and organizations together. Baloise is aware; innovation has to do with bets. We act with startups: there will be winners and losers. But finally, all our activities have one goal – offer solutions solving the issue of customers unmet needs. Because finally the judge for all our activities is the customer, short-, mid- and long-term!” 

I was impressed by the way Baloise used the strategies discussed here to join up dots from the patterns it observed in the real-world experiences of users.

Baloise saw unmet needs driven by megatrends and changing customer behaviour.

Wirth and his team mapped the evolving needs of customers from ride-share through car rental to buying and owning new and/or used vehicles. Even being able to rent-out such vehicles when not required. To offer a combination of such products and services with embedded insurance Baloise would need to invest in or acquire mobility companies which they have and continue to do so..

With this portfolio of companies, the Baloise ecosystem spans a wide range of mobility options each with embedded insurance for a wide range of personas.

Simple, fast, frictionless insurance.

This is not a vision but delivered to customers today; the vision is far more ambitious and shows that incumbent carriers are as able as any disrupter to innovate, anticipate customer needs and deliver a wide range of attractive products and services.

Compare this with the offerings from other incumbent carriers and brokers and consider the strategic focus across the whole of Baloise required to meet these formerly unmet needs.

At the other end of the scale there is a lesson to be learnt from Pay-u in Nigeria.

Founder and CEO Temitope and his business mentor “The Insurance Elephant” Patrick Kelahan explained how they found unmet needs.

 “Pay-u in Nigeria, identified the unmet need “accessibility and empowerment for regular Nigerians” in their search for comprehensive motor insurance. Rather than be held to paying an annual premium, having to contact an agent or broker, or having to wrestle with the particulars of claims, what Pay-u has done is build an app that allows prospective insureds to choose when they are insured via the app; how long they will use the insurance during a drive or even just parked up. If there is a claim at the Press of a Button, they file FNOL and there's automated assignment to a surveyor. 

The unmet need is the empowerment that Nigerians now must obtain insurance on demand at a very good cost and through use of a digital wallet there's no need to contact your agent unless you want to; it’s all in the hands of the driver. This is pretty much unique  in the world- pay by the minute insurance, but at its root the unmet need for driver empowerment drove the innovation”. 

Then Pay-u identified another fear and unmet need- providing loans to those who urgently needed repairs to cars and vans but lacked the funds.  Insurance customers need more than just insurance.

Jean-Louis Barsoux, Michael Wade and Cyril Bouquet have practical advice using a four-part strategic framework to avoid being left behind by innovators stealing a competitive advantage.

  • The Microscope Strategy
  • The Panorama Strategy
  • The Telescope Strategy
  • The Kaleidoscope Strategy

Image from HBR Magazine July/August 2022 edition - link at end of article

Before looking at these strategies I suggest it wise to avoid the danger of introspective thinking. I remember a series of workshops with a motor insurer aimed to generate innovative ideas. In thinking outside the box some crazy ideas were generated and people in the carrier began to scoff “ “Who would want that?” Or giggle, giggle- “That’s plain stupid”.

Yet when real customers were asked for their views some of these crazy ideas had real appeal.

So, one suggestion is to leverage the skills of people from different disciplines and backgrounds e.g. an iconic example is Lego who observed real children at play to lift the company out of near bankruptcy and employed social scientists to explain why they behaved as they did

The Microscope Strategy

This approach zooms in on the lived experiences of mainstream users to observe the minutiae of behaviour just like Lego.  In the drive to digitalise operations it is easy to get involved in the technology rather than customers’ real needs. Technology companies, e.g., insurtech’s, tend to be more disconnected from their customers than other companies. The same can be said for the IT teams at insurers and brokers.

Engineers often fall in love with technology for its own sake assuming that actual users are the same. Yet look at Microsoft which is said to be the world’s second largest recruiter of anthropologists to understand human behaviour and thus identify and meet unmet needs. See “An Anthropologist walks into a Bar….” For more on how Lego mines usable insights.

Smartphones. IoT sensors, wearable technologies, smart home devices, the connected driver & car, resident & home, pet-owner & pet are all sources of such insights and data.

Maybe that is how Steve Mendel and his team at Many Pets found out how much hassle pet owners had in picking up medicine for ill pets. They bought a UK company that did that, so they not only cover the cost of pet care but also deliver necessary medicines to the owners door. An unmet need.

The Panorama Strategy

You’ve looked at mainstream users and to that add in analysis of aggregated data like complaints, social media “Why don’t XXX deposit cash in my account the moment the claim is settled?”. Or monitor behaviour and health like Simply Health does to anticipate illness and prevent injury. Instead of just offering fitness programmes find out which exercises are the most engaging and effective for policy holders. Look at SideKick Health for such an outcome.

The Telescope Strategy

This involves looking outside mainstream users- look at fringe users, extreme users, or non-users. Outliers may reflect unmet needs. Chris Sheldrick an organiser of live music events observed an unusual problem for musicians and crews. Gigs are often held in remote locations with no clear address. Sixteen-digit GPS coordinates proved inadequate because of human error. He built an app that maps the whole world down to three-metre squares. What3Words.

That is now widely used by emergency services, engineers, field-service organisations, courier services and even, yes insurers. Yet I have heard an insuretech CTO comment “No-need; just use the GPS co-ordinates without thinking of customers, human-error, and customer convenience. See “This is Claims Settlement Genius. No Really, It Is”

These outlier niche groups were once hard to reach but they often gather on community sites like Reddit, Facebook, Quora and LinkedIn. Again, Lego found untapped insights this way. See the full link at the end of this article to finds out more.

I was fascinated by an pre-publication sneak at study sponsored by a major insurer "Time Machine Report for Insurance" . Scanning the motivations of young people- the insurance customers for the future.  Outliers today but mainstream tomorrow. This is just a snippet from the report- there's plenty more data so just follow the link above to pre-register interest.

Here are some trends from the report

- Highest on list are Car (100%) and House (97.6%). House is interesting given we know young people are under insured for contents insurance.

- Next are Family (84.3%) and Pet (85.7%). One thing that always surprises me is how much the teenagers talk about their families in their application videos. They may argue with them day-in, day -out but their families are so important to them.

- Education and work come next, with school (76.2%) and ability to work (79.8%). Young people today feel the weight of the world on their shoulders getting a job and contributing to society. They are labelled as the YouTube / Instagram / Influencer generation but I think that label is for a very small minority.

- Climate and environment come next, though specific risks come out more strongly than generic risks. Amazon rainforest (69.9%) and climate (58.3%)

- Surprisingly digital assets didn't come out as strongly as we expected. Only 2.4% for Fortnight Skins, 3.6% for TikTok audience and 16.7% for X-Box account. However, this jumps up to 24.1% for online reputation.

Katherine Walker of  STARTUP SHERPAS mentoring future innovators

The Kaleidoscope Strategy

Looking at the different colours and shapes that evolve to see patterns- look at distant players in the aggregate and commonalities. Your current organisational culture and focus may blind you to these patterns. Take Volvo which for ages focussed successfully on building safer cars. A decade ago, it found a new aggregated set of players- cyclists.

Swedish insurance data showed that cyclists accounted for a higher proportion of casualties than any other type of road-user. That unmet need led to Volvo introducing bike-detection sensors, autobraking, external airbags, sensors that can detect driver tiredness.

The amount of data generated by electric vehicles sensors is a mine of information and allied with radar and LIDAR data will help prevent accidents through better design and influencing driver behaviour. An OEM like Tesla aims to use such data to redesign vehicles to make them easier to repair, to drive development of its own insurance products, to estimate damage and pre-order parts and book vehicles into its own repair shops.

Carriers can collaborate with OEMs to achieve the same aim. To partner with ecosystem players like Verisk to surface and normalise data across all makes and models. Home, property & contents insurers can do likewise with ecosystem players like CoreLogic to overlay with the four strategies we looked at to find unmet needs.

Social listening tools, unstructured data scraping algorithms, semantic AI make it possible to sift through huge amounts of data and identify patterns. User-generated content (UGC) can capture insights at those moments of experience that let organisations spot unmet needs.

Putting it all together

Spotting unmet needs is not easy so use all four strategies to good effect. You will probably find it easier to start with mainstream users before delving into outlier groups. Mars Petcare collars allowed it to focus on both breed-wide nutritional requirements and the health and exercised needs of individual dogs. Imagine how valuable this is for pet insurers.

The digital tools and data available for today’s insurers is invaluable but as ever you need human intuition to judge feelings, context. Constant hard braking may be an indication of bad driving or of bad road signage, or current vehicle ADAS mis performing. Physical and digital approaches to analyse behaviour, patterns and clusters of customers go together.

The goal is to observe unmet needs before others do so that you can deliver competitive advantage by filling these unmet needs with products and services.  Before another carrier, insurtech, broker, MGA or new player in the market does. This becomes even more important as complete ecosystems continue to evolve.

I cannot but help say that vision, culture, leadership and strategy are vital ingredients success factors to identify and meet unmet needs. Together with that mandatory need to get buy-in across the organisation, the supply chain and distribution channels- especially brokers/agents. That is a challenge as larger ones may be dealing with 20/25 carriers and have their own motivations.

That leads me to the second need- technology partners that have the agile, flexible and quick to market deliverables to let you stay ahead of the competition. Below are a wide range of options. For a really deep look see   Creating value, finding focus and choosing the right technology partners  but below is a short-form version

Traditional core insurance platforms Guidewire, Duck Creek, Majesco, Pega, Innovation Group and so on. Good on breadth of functionality but sometimes lacking in specifics e.g., claim management. And traditionally involving Capex and high annual licensing costs though that is changing.

SaaS and Micro-service architecture core platforms ICE, EIS, Genasys, Duck Creek

Quote & Buy, MTA & Renewal Platforms like Go-Insur, HUGHUB, iptiQ that enable an insurer to allow a customer to interactively manage all their policies from one dashboard

Digital Claims Platforms RightIndemSnapsheet, ClaimsGenius, Claims Technology, Salesforce Industries, Five Sigma, etc

Ecosystems Providers incl. telematics data exchanges: Verisk, CoreLogic, Lexis Nexis Risk Solutions, Mitchell International, CCC Intelligent Solutions and Arity

Point Solutions Tractable, Audatex/Solera, Shift, Friss Sprout.ai, Solera and many others

Telematics Service Providers: Movingdots, Octo, IMS, True Motion, Cambridge Mobile, Vitality Drive and The Floow

Shared Mobility Systems: Uber, Lyft, Enterprise CarShare, Zipcar, Car2go, GIG, Turo, Getaround

Combined claims services and technology providers Crawford & Company, Sedgwick, Davies Group, Claims Consortium Group. Control€xpert etc.

No-Code/Low-Code app building platforms from Unqork, Netcall…

Embedded insurance Wrisk, Qover, Wakam etc

Final tip: don't assume that spotting unmet needs will shift exclusively to the digital realm. Although digital technologies can reveal previously invisible patterns and data, they also suppress important cues—feelings, intuition, and context—that are accessible only through in-person sensemaking. Physical and digital approaches are best seen as complements. Used together, they can enable you to look further afield and on a larger scale than ever before.

Good hunting.