As InsurTech and insurance innovation are creating new business models, products and processes to meet rapidly changing customer demands and expectations, we are beginning to see the shifting views of regulators and rating agencies. Who would have thought the combination of innovation and regulation would join together to accelerate the future of insurance? These two words – innovation and regulation — which seem contradictory, are actually working together to ensure that the industry is relevant in a new digital era.
- Innovation Must Move Beyond Incremental – Innovative companies are undertaking digital transformation from the outside-in. In the process, they are rewriting the rules of the insurance business, redesigning organizational and business model structures, and reinventing how products and services are defined and delivered.
- The Regulatory Environment is Now Innovation-Friendly – Rating agencies and regulators are also beginning to embrace this era of innovation. They are creating an environment to advance insurance innovation and invention, from AM Best’s new Innovation Rating to the sandbox concept proposed by the NAIC and being implemented by several states.
- Use a Two-Speed Strategy to Adapt and Thrive – This strategy includes both Speed of Operations, the transformation of existing insurance operations; and Speed of Innovation, the launching of new business models or products…critical elements to becoming an insurance innovation leader.