Innovation as a step function

Innovation as a step function

Step Up

The entrance of startups to the insurance industry, nearly four years ago (2015), introduced a change, innovation, that made all the components, whether they are linear or passive, to react. The new teen spirit that the startup introduced acted as a step function that increased the value of the industry. The input may be a nice and clean function. It has a ripple effect that affects the entire pond until is converges on the new and higher level.

Ali Safavi talks about Innovation at a Global scale

Ali Safavi is the Founder and Global Head of Plug and Play Insurtech, an Insurtech-focused innovation platform in partnership with some of the largest insurers, reinsurers and brokers in the world including: Munich Re, USAA, State Farm, SOMPO Digital Lab, Farmers, Nationwide, Deloitte, Willis Towers Watson, Aviva, Swiss Re, and many more. Since its inception, Ali has been a catalyst in building Plug and Play Insurtech to 6 global locations, over 70 corporate partners, 120 accelerated startups, and over 25 insurtech investments. Ali is also a Principal at Plug and Play Ventures, the venture arm of Plug and Play Tech Center where he manages and leads investments in startups in different spaces including insurance, travel and hospitality, and IoT.

We had a lovely InsurTech Talk over wine.

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