Sacramento, Calif. — In the insurance industry, the pace of innovation continues to pick up as the industry lags in overall organic growth. This was the message from Julie Davis, EVP, Chicago-based Aon Corp., who recently presented at the Mid-Year California Women's Network Group Conference in Southern California. Innovation, she said, has a sense of urgency, and the insurance industry has an appetite for change. With the industry's overall weak organic growth, it creates a perfect storm for change.
"Many things about innovation are different now," Davis said. "Today's innovation is driven by people, not technology. For the most part, the insurance industry has pushed a great deal of cost efficiencies through better use of technology. Clients, insurance companies, brokers and agents have all benefited from better technology tools."
But Davis predicts that in the next five years, innovation in the insurance industry will change and become more about design, new product development, creation (and re-creation) of distribution channels and business models, insight to identify unmet customer needs and ability to repackage insurance products and services.
During the first half of 2008, approximately 50 insurance carriers and wholesalers announced new insurance products. In part, they included AIG, Ace USA, Beazley, Hartford, Lexington, Navigators, OneBeacon, Philadelphia Insurance Companies, Swett & Crawford, XL Insurance, Liberty Mutual, Westrope, Zurich, Beecher Carlson, Allied World, Arch and CNA.
"While these new product introductions represent progress, getting innovation into the DNA of the insurance industry is a challenge" Davis says.
"In order for innovation in the insurance industry to take full flight, you have to go beyond the traditional definition of innovation and develop a culture in which new ideas are a part of the DNA and touch all sides of the industry,” Davis says. “Innovation is deeper than a single Web site and insurance product. Innovation and thought leadership also include new ways to engage in a discussion with clients, repackaging and publishing ideas and the ability to develop products and services that deeply understands its business and the needs of its customers.”
Davis further presented, "Industry experts report that the average organic growth rates during 2007 fell to around 3.7%. When you combine this with a slowing economy and continued soft insurance market, future earnings in the insurance industry will require a more active and creative innovation pipeline for industry rejuvenation."
Source: PR Newswire
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