Gabriel’s 2 Worlds: Innovative Insurance

Back in the late nineties, I studied an MBA specialising in innovation and technology. There were a couple of points that have stuck with me since then, and came to the fore as I was preparing for my recent innovative insurance presentation at FIDES in El Salvador.

Clayton Christensen, author of ‘The Innovators Dilemma’, stated ‘companies can do everything right and yet still lose their market leadership – or even fail- as new, unexpected competitors rise and take over the market.’

It’s still true in today’s world, where great companies can fail, not because they are run badly, but precisely because they are so successful in what they do, they become stuck in a rut. They lose their market position simply because new competitors disrupt the market, doing things differently and take over.

Innovation doesn’t need to be disruptive. But, it does need to be on the agenda. As an industry, we need to support innovation, incentivise it, promote it, let it flourish. There needs to be a culture across the board to recognise where innovation exists and create an environment to let people explore new ideas and new risks.

The conversations surrounding innovation in the insurance market are largely focused on products. When in fact, as a service driven industry, we should first and foremost, focus our attention on how innovation is impacting service.

Many of the innovations we call ‘new’ are in essence just a different or better way of delivering an existing product. What has historically made the headlines as ground-breaking and innovative, are often not new, they are just packaged or marketed in a new way. You could argue, that the innovation lies in the service, not so much in the actual indemnity of the product.

Examples include, underwriting a wine taster’s sense of smell, a footballer’s legs or an opera singers voice. They weren’t new products, just a different way of marketing, distributing and underwriting a personal accident policy, with a high limit and very specific conditions for the insured.

The value of a policy, for instance, with a footballer is not the financial payout, but the access to the specialists needed to assist in recovery following an injury. It’s the value in access to the very best doctors and support, which comes down to service, not product.

Cyber is another great example that is often touted as a ‘new’ product. In reality, it’s made up of existing products stitched together with a wrapper of extra services. Where the value exists for the insured is actually the consultancy to help mitigate the chance of a loss and the support in responding after an incident. Therefore, the service before and after a claim.

One of the ways we’ve innovated at Probitas, is to think in a very focused way on how we can help the broker be more successful. We have structured products specifically with the broker in mind – how to save them time and money in the placement of the insured’s multi-risk policies.

We have built technology driven solutions where the broker can get a quote and policy documents for large and complex portfolios which need cover for property, general liability and financial lines. It’s the art of bringing the various elements of underwriting together and producing a tailored insurance product. It’s not revolutionary, but it is still innovation.

The benefits in an example like this, is that you have a collaborative approach, which can allow for creative exploration of the solution. At Probitas, we have an entrepreneurial ethos, and we recognise the value in bringing together experts from across the company to build our solutions.

But, we don’t stop there when it comes to collaboration. Innovation can’t blossom if you are just inwardly facing. Instead, we listen to what the market is saying, what our broker partners need and what the insured is crying out for.
Working symbiotically to provide a solution, of course we look at the product, but more often than not the actual innovation comes down to service.

And, this makes sense, when we consider that it’s consumers that are on the whole driving the call for innovation in insurance. They aren’t crying out for new innovative products. They are crying out for innovation in the service – the experience and the added value which comes with the underlying insurance product.

My presentation at FIDES explored a number of different scenarios, but the key take aways from each and every one of them are:

• Collaborate – never work in isolation and allow creativity to flourish
• Focus on the end result, what is adding real value all parties
• Think services first, not products
• Support and recognise innovation
• Prepare to invest in innovation across the business, both in terms of finances and time