Insight on Innovation: from legacy company and startup

Innovation in insurance is not limited to a new shiny technology. New products, new insurance products, can be and are innovative in many ways, and they require people, processes, and a mindset to make them happen. 

Mariel Devesa, head of global business development for Phyn and former head of innovation for Farmers Insurance, shared her experience and insights on innovation. Stephen Goldstein joined Mariel to facilitate the fireside talk and to ask the hard questions.

There is a misconception that insurance companies don't innovate.

Carriers don't have a shortage of ideas, but they need to start somewhere. One of the ways to prioritize is by asking where is the most substantial impact.

"The shiny disco ball syndrome" is when someone says "we need to do this" and then four weeks later "oh, we need to do that," and later "we need to focus over Continually shifting focus on whatever is in fashion or is getting the most publicity at the moment."

Building trust

"I remember that at the beginning of my work with Gus Fuldner, VP of safety and insurance at Uber, it was all about building trust." Both sides had reservations and concerns, however, trust was built, and it resulted in drafting the “compromise language,” [1] which created a framework for states to pass and provided clarity to build an insurance offering.

Interview with Nuno Horta Innovation at Ageas Portugal

Interview with Nuno Horta Innovation at Ageas Portugal

The insurance industry is evolving.

"Evolution is the survival of the fittest."Herbert Spencer

The innovation teams, in the insurance companies, are acting as one of the forces that help the company to change and adapt in its lifetime. Please read a recap of an interview that I conducted with a force of "enterprise survival" and growth - Nuno Horta.

What is innovation for you?

Innovation is an answer to a problem - you have a problem, a pain, here is a remedy for it. There are incremental pains that you can manage. A classic example, let's remove the paper from a process that can take two days to fulfill.

"People mistake innovation with creativity. You can be very creative and have great ideas like building the next wheel, but, in my opinion, it is to be smart with what you have."

Paulo adds "it all about making money from the resources at hand. This is the guideline for me." Paulo's pragmatism and background in a large IT consulting company add an important dimension to the team as they deliver value by "remedy innovation" (solutionizing) and "specialist" (internal consultants).

What is the mission?

There is a multi-year plan in place.

1. Unlock the startup culture in Ageas business units. The insurance industry is known to be conservative, but today they are more receptive to change than anyone else. It is part of the innovation team job to work with them and show them new ways to do things and develop their own projects. The company is open to hearing these changes.
2. Challenge the status quo. Bring up new value propositions and new opportunities.

"We need to bear in mind that the only way to make innovation is when the business is making money and the business is flowing."

Recap - Talk with Jay Cohen, Deloitte.

Recap - Talk with Jay Cohen, Deloitte.

Many people consider regulation as a stifling force that prevents innovation and progress. Where, in reality, the job of the regulators is to protect the customer and promise a fair practice that will serve the population.

"The public wants two things from insurance regulators. They want solvent insurers who are financially able to make good on the promises they made and they want insurers to treat policyholders and claimants fairly." -- The National Association of Insurance Commissioners (NAIC)

Regulators make sure that the "players" in the insurance space are responsible. Every item that the regulators require that sounds like a burden is an opportunity. In his talk, Jay Cohen covers the latest hottest topics that the NAIC and the insurance commissioners are examining and the opportunities that they hold. The insurTech trend introduces many changes that affect many control points.

"Reach out to us early in the process. Educate us so we can educate you. We want to talk to you, early in the process" — Katharine Wade (CT insurance commissioner)

The regulators know that they are behind the industry so they take actions to catch up. First is the realization that we live in a world that technology is doing more and more of the work behind the scenes. How to you ramp up to be an active partner in the InsurTech world?

“Insurance regulation must keep pace with rapid developments in technology. History is littered with the remnants of companies and organizations failing to keep pace with change.” -- The Wisconsin Insurance Commissioner

Interview with Dominic DiMarco - Entrepreneur in Residence (EiR) QBE

Insurance companies take active steps towards modernization to keep up with customer's expectations and recent entrants to the insurance space who use the latest technology. Carriers introduced new entities into their organizations to champion and facilitate progress. Today there are innovation teams, innovation labs, venture arms, accelerator programs, and the less familiar function -- the Entrepreneur in Residence (EiR).

To understand better the avant-garde insurance that is done by the large insurance companies and their innovation programs I reached out to the leading insurance innovation teams.

Here is a short interview with Dominic DiMarco, EiR in QBE insurance, the man that claims to have the best job in the insurance industry.

"All the big businesses are trying to figure out how to do things "faster, quicker, easier and leaner" and they don't have those skills in their four walls to do it themselves most of the times."

"There is a difference between the IT infrastructure and core systems to the innovative work that is happening on the fringes. You can't replace a core system at once."

"Insurance companies, at their core, are massive financial institutes."


Scalable Innovation

I have been toying with a new concept of how to write a post and deliver my ideas in a clearer and faster way. In this post, I share my opinion on innovation at scale in an insurance company. Earlier, as I was working on the idea, I found myself charting on a page the relationships and the flow of the key points that I wanted to write about. So, instead of gathering them in paragraphs with a scent of humor, I plotted a mind map.

Innovation in large scale is challenging for many organizations. Here is a mind map on innovation at scale for the insurers.

scalable innovation.png