The insurance industry seems to suffer from a variety of ills right now, not the least of which is the claim that it lacks the ability to keep pace with technology best practices. Repeatedly compared to the successes seen by the banking industry, insurers are thought to quietly plod along, focused on a methodical, risk-averse approach to using technology to foster both organic and acquisitive growth.
To make matters worse, the term "innovation" isn't typically used in the same sentence with words such as underwriting, actuarial or mortality tables. Instead, the term usually describes pioneers, specifically in technology.
And for good reason. Consider the role technology has historically played in innovation. From the conduction of electricity, to the invention of the telephone, to our space program and beyond, technology has helped shape our present day existence.
Or has it? If we consider the brilliant minds that work individually and collectively to create innovation, we see that technology is but an enabler.
So where does that leave the insurance industry, already battling a bad rap as it struggles to use various forms of innovation to compete against overwhelming challenges?
Consider the first known formal "fire" insurance company, known as "The Insurance Office," established in 1667 just a year after the Great Fire of London. According to the International Risk Management Institute Inc., Nicholas Barbon M.D., was one of the earliest proponents of free trade and instrumental in establishing the firm.
Barbon's innovation had nothing to do with technology; rather, it was part of a larger business strategy. Instead of relying on the city's inadequate fire-fighting support, the company employed actual fire-fighting teams to put out fires in the buildings it insured. Granted, the company's initiative may be viewed as scurrilous held up against today's business practices, but the result of this "strategy" represents one our readers would appreciate even today. Increased revenue enabled the company to diversify beyond insurance, and grow by employing other business-strategic innovations designed for the future, such as investing in commercial and residential real estate development, something sorely needed after the Great Fire.
So, when innovation represents a technology that enables corporate-wide strategy, the result is a perfect fit designed to breed innovation for the future.
The article highlighting a corporate-wide initiative underway at Farmers' Insurance (Insurance Networking News' INNovator of the Year), is evidence of such success, and puts a new perspective on the creative thinking that drives individuals and organizations to best practices. Congratulations to Farmers, and to their team of innovators.
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