Insurance Inspiration at the Crossroads
A few weeks ago in our opening blog series on the Insurance Renaissance, we discussed how the climate of change we saw in the Renaissance of the 1400’s holds lessons for the current state of insurance. In both periods, we see the epicenters of change and innovation.
For insurers, the Renaissance is more than an analogy. It represents a real pattern of cultural shift with insurance business implications. Its hallmarks are now repeating themselves. For example, today we see digital use and globalization as potent business drivers. If global barriers to communication hadn’t fallen, and new technologies hadn’t become so prevalent, it is unlikely that we would be in the midst of such groundbreaking change. The lowering of barriers during the Renaissance brought about similar change.
During its beginnings, Florence was in the midst of a trading boom that brought new money, goods and ideas into the region from Western Europe, Greece, Arabia, Egypt, Persia and China. Banks grew. Florence became the financial center of Italy and the broader region. Trade routes reduced provincial barriers. Shipping improved. A system of insurance was even in practice, protecting Italian cargoes on their voyages as early as 1300.
These cultural crossings (networks!) resulted in leaps forward in art and science. Ideas were currency just as important as textiles and spices. Innovations in practical sciences, such as mathematics and architecture, benefitted from broader thinking. It was funded and driven by the new wealthy — a trading class that hadn’t previously existed in quite the same way. Today, we are seeing a similar influx of money and a new class of insurance technology investment. The Sydney Morning Herald, covering a report on disruption by PwC, recently stated it this way:
“The insurance industry has largely remained the same in the past 100 years, but the sector is in for its biggest shake up as investors continue to pump billions of dollars into "insurtech," fuelling sweeping changes through technology.
Insurance is the second most disrupted industry today thanks to a growing number of start-ups and technology companies eyeing slices of the insurance pie.”
So, where insurers previously may have had great ideas, they now have ideas + technology (insuretech) + financial resources + people/talent to pursue their ideas. At the same time, with no barriers to access, no legacy systems to hold them back, and access to robust insurance cloud platforms, startups and greenfields from within and outside the industry, are becoming new, innovative players. For organizations that wish to remain competitive, the questions then become,
- How do we adapt with ease to the change and disruption?
- Can we reimagine the possibilities of doing things differently?
- What do we need to do technologically to seize the opportunities in a shifting market?
The new pursuit of agility, innovation and speed
Business innovation and digital readiness is a real, palpable, bankable asset. Organizations that plan to fuel their own growth, create new partnerships and generate innovative products, need to quickly consider and shift gears to transform to the digital age, highlighted in our Future Trends: A Seismic Shift Underway report. Simplifying environments to bring consumers closer to service and closer to the point of sale will help. Modernizing environments to generate and test products faster is vital. Transforming business operations, utilizing data for continual improvement, and opening every available channel are goals worth setting. To thrive, large or small, the new organization needs agility so that it can quickly capitalize on the innovative ideas found by mixing itself in the marketplace. At Majesco, we are preparing insurers every day for the new culture of connections. We are assisting insurers of all types in their pursuits of agility, innovation and speed.
There’s genius in the mix.
Insurance, once somewhat isolated, is now becoming part of the digital mix. Like adding an Indian voice track to a French pop tune with a Rap beat, the results can be pretty hip. Where can insurers find inspiration in the cross-industry digital mix? How do they spontaneously get inspired?
The short answer is, “Look around.” But the real answer is, “Look nearly anywhere and you will find innovation everywhere.” Genius moments happen most often in environments where groups of people are in touch with industries, geographies, technologies and groups outside of their own environments. Those groups include, of course, consumers. Looking at consumer purchase patterns across all industries will give insurers a new view of how to reach them.
For example, recent Google research found that nearly 20% of smartphone users research or purchase products while they are in bed in the morning or evening. (Read more about these trends in Majesco’s Future Trends report.) Mix this fact with the idea that consumers are also looking for multiple quotes and good information on insurers and you can understand how mobile-ready aggregators (such as Policy Genius) are on the rise.
Urbanites who seldom drive don’t want to pay high auto premiums. They might rather opt out of driving altogether. Mix that trend with telematics capabilities and a pay per mile insurance product (such as MetroMile) makes tremendous sense. It doesn’t take real genius to see genius opportunities. It just takes time spent observing customer and market trends and marrying those trends to technological capabilities.
Customers are also increasingly moving their retail purchases to online purchases. That’s great news for insurers who have never been terrifically suited for retail-type sales anyway. What insurers need is face time at the right time, when someone recognizes his or her need for it. Hence, we see insurers increasingly partnering with companies that can buy them face time with products that match up with timely needs. Digital capabilities, integrated data capabilities and agile administration will all assist insurers as they reach into the mix to find their unique niche of opportunities. The same Insuretech that is causing the formation of insurance startups and is funded by venture capital is available to traditional insurers. In many or most cases, established insurers are in a better position to capitalize on it by simply prioritizing their need for innovation — deciding that their organizations will be centers of innovation.
Insurers can tap into further ideas by looking at product trends in foreign countries, tapping into the expertise of technology partners, working cooperatively with universities to hold innovation days, partnering with companies outside the industry like automotive, retail and more, and by spending concerted time looking at the road ahead. In all of these cases, insurers will find innovative encouragement by inviting ideas from outside the organization to transform the culture and ultimately the business. After all, it is the Renaissance within each individual insurance company that will provide innovation, excitement and opportunity to compete. So aggressively pursue agility, innovation and speed … and join the Insurance Renaissance rapidly unfolding.