A recipe for innovation in insurance

Innovation in insurance
Innovation in insurance

If a recipe for innovation existed, what would you consider to be the key ingredients?  Based on our latest project experiences, we took a shot at this exercise.

June 2020 – As a base, we would need a company culture that accepts at least a decent amount of risk. All new things have a way of surprising us, so you cannot push the envelope unless you are open to account for some things not going as expected.

Next, a thorough willingness to understand the expectations of the modern consumer in terms of user experience, mobile convenience and the need for human interaction.

Another essential ingredient would be a clear organisational destination for your innovation projects to be born and raised. Examples include a strong and well-staffed innovation departments or dedicated innovation hubs and communities. Lloyd’s Lab, Axa Labs, and Area24 are notable illustrations on the international market.

Or, we would also suggest the involvement of in-house innovative excellence. Specific product research, design and knowledge increases the chances for success on the market. A good Belgian example of this is Mobly, the mobility answer from Baloise Insurance.

To complete the base, make sure to apply an agile way of working in order to stay nimble and able to react to competing initiatives.

Secret spices

After they were released to the market, we have seen innovation projects succeed and fail. Shine and be forgotten. Supported and then discarded. We thought about what made the difference between the former and the latter, and concluded that two additional markers– in the spirit of consistency, we will call them ‘spices’  – were clearly more present in the successful examples.

The first spice is clear ownership for innovation. Preferably embedded in the heart of your company. True ownership means inclusion of key innovation staff for important business meetings, participation in brainstorm sessions around value proposition, and a seat at the Management Committee’s table for the Head of Innovation. If the role and goal of innovation is at least known and acknowledged in all layers of the insurance company, your resulting work will be imbued with significantly increased longevity and resilience.

Last, but most certainly not least, we advise you organise for maximal accountability. Why start up a project if its merit and value creation is not included in the management’s KPI’s? Without a structure of accountability, your whole project risks not being supported (or even ignored) by your business colleagues. Account for success, and for failure. It is the only way to make a lasting and durable impression upon all parties involved. Fulfilment of KPI’s can grow support for additional funding, a possible game changer for next-level innovation! Accountability can be tricky, so do not mistake value creation with immediate return-on-investment. These are not always synonymous. Innovation can be a difficult process with trial-and-error fazes, with cash-flow entering the equation in the mid-to-long term. Choose the right KPI’s, identify goals on the short- and long-term, and you will have the perfect base for a successful project kick-off.

Bon appetit!