To anyone who doubted that Los Angeles-based Farmers Insurance could assign a cool $1.2 billion in gross written premium to an initiative that holds innovation at its core, think again. The 2009 Insurance Networking News' INNovator of the Year, Farmers formalized an enterprisewide framework and methodology that spins its "IdeaPoint" innovation plan forward into real results, and the company is building momentum with its plan for 2010 and beyond.
INN caught up with Mark Smith, Farmers' chief strategy officer, who admits that there are a certain number of challenges inherent in setting the innovation bar so high.
"Even with the CEO support that we needed to pursue innovation, it's been difficult at times to gain buy-in and sponsorship from all the individual business and functional leaders," he says.
But it's not impossible. Part of Farmers' 5-year FarmersFuture market leadership strategy execution included Smith and his team taking measured steps to facilitate IdeaPoint, a rapid product and services development methodology that uses innovation, collaboration and teamwork to facilitate and implement new growth ideas and operational improvements.
"Once we gained CEO sponsorship in early 2005, we conducted our first two IdeaPoints, which served to build awareness and a strong following that ultimately helped build momentum and sponsorship for an additional 33 IdeaPoints over the next five years," Smith reports.
Smith says Farmers can attribute its current financial success to many of those innovation initiatives that have focused on ways to establish sustained profitable growth by focusing on its customer value proposition with improvements in new business, cross-sell, and retention.
Looking ahead, says Smith, the bar will continue to be raised, as the company expands its IdeaPoint innovation framework and methodology to additional Farmers opportunities as well as to its Zurich Financial Services parent.
Ideas on the table include the introduction of a new Zurich product (extended warranty addressing specific gaps of competitors in Latin America); an IdeaPoint focused on Zurich's North American business operations to identify ways to improve the use of predictive analytics as well as the engagement of underwriting, marketing, distribution, product development and information technology functions, and improved customer insights into the new product development process to improve the customer value proposition.
"It was and is a continuous process of education and marketing to maintain focus and keep innovation top of mind," claims Smith, "and we have institutionalized many tools, including IdeaPoint, that help make innovation part of our culture and mind set. It is a journey that we are still pursuing, but we are making significant progress and it shows in our results."
Those results don't just include $1.2 B in GWP; they also play forward to 14 consecutive quarters of profitable growth since the company launched its FarmersFuture strategy, which serves as the insurer's innovation inspiration.
See their story by visiting
(c) 2010 Insurance Networking News and SourceMedia, Inc. All Rights Reserved.
