There are two beliefs tied to insurance innovation, said Michael Merwarth, USAA’s SVP of Strategy & Innovation during his keynote address at Insurance Networking News' inaugural DigIn Conference in Austin, Texas. One is large, old-established organizations are not good at change. The other is the industry is not changing fast enough to keep up with customers’ expectations.
“It’s important to USAA to make a member’s next experience as great as their last one,” Merwarth said. “But the thing is, our members don’t compare us to our actual competitors. They compare us to experiences they’ve had with Amazon, which delivers packages the same day.”
According to Merwarth, experts predict today’s Fortune 500 companies have an expected life span of just five to 15 years. To beat those odds and stay relevant, USAA adopted five key “ingredients” or steps 18 months ago. These include: improving product design capabilities by hiring designers, enhancing data analytics through the help of data scientists, relying more on third parties and changing its internal infrastructure, even if it means having to reeducate or repurpose staff.
”It was easy to think, 'Gosh, why go and change strategy when it has proven to work?'" said Merwarth. “But all the things we did to achieve our current success are different from what will help us survive.”
Arguably the biggest change in philosophy for USAA is its commitment to non-stop testing and learning of new products, such as drones. The insurer is also committed to working with, startup incubators and aggregators, shown by a recent partnership with Plug & Play announced in April, and its collaboration with Google Compare. Despite the tech giant’s decision to suspend its aggregator site indefinitely, USAA learned risks and strategic benefits to working with one, Merwarth notes.
“Our old mindset was a never fail mentality. But in a quest for perfection u go really slow, which presents two big liabilities in the modern digital era,” he said. “First, the inability to go fast will hurt your company’s internal processes. Second, you will miss opportunities for improvement because you aren’t quite sure about a product or change. We owe it to our members to do whatever it takes to change even if it means doing something completely different.”
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