Insurance companies recognize that they need to embrace digital innovation to meet changing customer demands, and are developing the internal structures and processes to facilitate change. That's according to a recent report from Celent analyst Mike Fitzgerald, "Innovation Outlook 2017: Making Progress."
"Insurers are putting a lot of effort into customer experience, especially on the front end," Fitzgerald says. "It's a little one-sided now, but it's not a bad place to start. That's the reason the report is so positive."
Fitzgerald polled a small sample of insurers — 20 in total — as well as representatives from 10 other financial institutions. He found that insurers are optimistic that their organizations are willing to embrace innovation, but many are still waiting for dedicated innovation units and formalized executive ownership. While half of respondents indicated that there was a key executive championing innovation, only one in five said their company had a chief innovation officer.
In Fitzgerald's view, there are three key indicators of innovation effort success:
- Responsive leadership from the top
A business — not IT — executive championing efforts
- A culture of innovation, where insurance companies are willing to try many things, even if some fail, than working on fewer projects with more guarantee of success.
"The innovation that's starting to happen is more about building the capability to deliver changes faster and redesign things -- it's from a sytstemic standpoint, Fitzgerald says. "It really comes down to changing the approach."