Sometimes, the stars all seem to align and that light can bring things into sharp focus. This year's IASA conference focused on knowledge and innovation.  The COO Roundtable topics challenged traditional views and challenged the participants to focus on innovation, change, differentiation and competitiveness.  All of this combined to emphasize how we - as an industry - must rethink, transform and innovate the insurance industry in response to the many different changes we are experiencing. 

The book we provided to the COO roundtable participants, “The Innovator’s Dilemma” by Clayton Christensen, reminded all of us that history teaches us lessons and that we have an opportunity to use disruptive technologies, new ideas, business models, channels, products or partners to upset the existing “order of things” in our industry to build brighter and stronger futures.

Now most would consider the topics of innovation and insurance together an “oxymoron”.  We often see ourselves as slow to move and slow to change, but that is not really the case. As an industry, we have innovated before … during the 1970s, 1980s and early in the 1990s when we created new products, services, distribution channels and in some cases, entirely new companies by using emerging technology as the foundation for innovation.  In each of these decades, we also saw new leaders rise while existing leaders fell based on their ability to respond to change and become innovators who could lead the industry forward  to this new future while creating a new wave of competition.

Today, we are once again face similar choices with a new wave of innovation and disruption. This time, the choices are more intense, complex and transformational than ever before.  Major forces are converging that are fundamentally changing the entire paradigm of insurance.  These forces include: a fundamental power shift to the customer with new demands and expectations; new and disruptive technologies; use of data to gain business insight, assess and predict outcomes and offer new products; and finally new business models underpinned by technology deployment options such as cloud, SaaS and BPaaS.

Unfortunately, too many companies, both insurers and vendors, do not take the time to understand, assess and respond to the strategic impact of these forces. While some will respond, accept, understand, and innovate within their organizations, others will not. Sometimes, by the time they do respond to change, it is just too late.  While, historically, they may have helmed well-run, operationally effective and efficient companies that did well financially, times changed and new forces came to bare on their organizations and the industry. Those same strengths can transform into weaknesses and the results of failing to rapidly embrace change, disruption and innovation can be catastrophic.   
No one denies that keeping the company running well financially is crucial as it provides the “resources” that allow them to invest in the future.   However, the team running the company is not necessarily the best team to “reinvent or innovate” for the future.  Christensen says in his book that the management practices that are most productive for exploiting existing technologies are anti-productive for emerging, disruptive technologies.  

So what can we do?

We need teams looking at the future of insurance, “thinking outside the box”, looking at other industries for ideas, looking to change market dynamics on customer perceived value, products and services, creating new markets and redefining the competition.

Is that just a dream?

No! We are seeing these changes happen today with the companies we are working with and with new entrants in the market.  Rather than trying to change within using the existing teams, many are setting up new organizations or Greenfield operations, using new hosted, cloud, SaaS or BPaaS models for core systems deployment, strategically outsourcing to add value and creating new business models all with the purpose and focus on innovating and creating a new future.

Will they be the next “industry innovator”?

Only time will tell … but at least they are thinking about the future of insurance, understanding how innovation is a critical differentiator and executing plans to create that future!

Denise Garth is the executive vice president of strategic marketing and industry relations, and global head of market strategy for Innovation Group North America.  She can be reached for further comment or information via email at 

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