More than a third of insurers are investing in major operational improvements or transformational technologies, according to “Innovation in Insurance/Modernize.Optimize.Innovate,” a research brief from Strategy Meets Action.
“There is tremendous opportunity for innovation in the insurance industry. The business value is there, and it is enormous. Next-gen technologies are making it possible to pursue a big vision, by taking small manageable steps one at a time,” said Deb Smallwood, SMA founder and author of the briefing.
For the sake of the survey, SMA created four categories, described below, and asked insurers to decide which description best describes their technology strategy.
Just fewer than half (49 percent) said "Modernize," 23 percent said "Optimize," 13 percent said "Innovate," and 15 percent placed themselves in the "Replacement Plus" category.
“About 45% of insurers report that the primary impetus for innovation in their organizations stems from one or more of these three business drivers: improve customer service, compete more effectively and enable growth. A third of insurers cite the desire to improve profitability as an innovation trigger. It is interesting to note that only 13% say that recognition as a market leader is a business driver for innovation. This indicates that innovation efforts in the insurance industry are being pursued to deliver real business value and are not being tackled purely for marketing reasons,” the report reads.
The report ends with several suggestions for fostering a climate of innovation, including creating a culture of innovation, creating a collaborative work environment, and leveraging next generation technologies, such as social media, mobile technologies and analytics.
Roughly one-third of insurers drive innovation with formal, full-time teams, a quarter with part-time or virtual teams, and 37 percent have no formal teams in place; and 14 percent use specific tools or processes to support innovation efforts.
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