For companies looking to effectively implement insurance innovation, Everest Head of Group Innovation Ryan Cole, has developed a collaborative process that starts with six actions that are mission critical to laying the groundwork for executing a successful engagement.
As an industry, let’s make the most of this unique moment when there is so much opportunity to innovate.
As technology continues to evolve at a breakneck pace, strategic investments in insurtech are becoming critical for an insurance company’s success and service to their clients and brokers. An enormous amount of capital and resources are being deployed to drive innovation in the insurance industry. In the first half of 2021, according to industry data, there was a recording-setting $7.4B in venture capital inflows into the insurtech space, exceeding last year’s record of $7.1B (CB Insights). Despite this influx of capital, carriers, brokers and risk managers are still only scratching the surface of these new opportunities. Why is this the case?
The Everest eIQTM Innovation team has observed that innovation engagements often succeed or fail based not on the functionality of the technology itself, but instead on successful change management. In many companies, we often see an approach where innovation is the responsibility of one team, or it happens in silos across the organization. This can be a recipe for failure. Instead of a siloed approach, our eIQTM Innovation team sees stronger results by working directly with business units across the division to drive thoughtful and practical innovative change. As part of this collaborative process, we have identified the six actions below as mission critical to laying the groundwork for executing a successful engagement. Importantly, these actions are the responsibility of the full project team.
Defining Upfront Change Management: An “Upfront” change management approach is critical to laying the groundwork for a successful innovation engagement. The word “Upfront” has two meanings in this case: it indicates that the change management should be transparent, and that it should be done early on before the engagement even kicks off.
Transparently Define Expectations: Many insurance professionals do not have an intuitive grasp on what various Artificial Intelligence (AI) technologies can do. Hype from the media and the insurtechs can make it seem like these technologies are magic bullets that can “do it all” with little human intervention. Implementing AI tools requires effort and patience from the business – rarely do they work perfectly out of the box – which is why it is important to define the team’s expectations for a given technology. Ensuring that all stakeholders have an upfront understanding of what the technology can do prepares the team for the hard work ahead.
Prepare Team for Iteration: After the initial excitement of a product demo, it’s important to ensure that everyone involved recognizes that there is almost always going to be significant iteration necessary to optimize the value of a new technology. While an initial game plan and detailed timeline are key, the team must be flexible enough to pivot based on what is or is not working.
Identify a Champion/Early Adopter: Before kicking off the engagement, make sure that the team includes someone who is truly excited by cutting-edge technologies and can ultimately help drive adoption to the broader group. This early adopter can continue to drive the project forward and ensure its continued success once it is handed off to the broader user group.
Balancing the early adopter champion with someone on the team who is skeptical of technologies can add additional value by ensuring candid feedback.
Focus the Initial Scope on the Biggest Solvable Pain Point: Whether you are at a carrier, brokerage or a risk manager, you’ll likely find an unlimited number of challenges that your team’s innovation project could address. Resist the temptation to boil the ocean and instead, narrow the scope to a single meaningful pain point that is actionable. The faster the end users of the tool see a concrete benefit, the easier the change management process becomes.
Don’t Lose Sight of Scalability & Optionality: While the team needs an upfront understanding of the work needed to implement a new piece of technology, they should also understand the potential value and ability to expand upon the project. For example, if the innovation pilot succeeds, it may be scalable to other divisions, or able to capture new data that provides optionality for future analytics work.
There is so much opportunity to innovate in the industry right now. As we close out the year and look ahead, insurtech innovation is at an inflection point as technologies and business models mature. Maximizing this unique moment will ultimately come down to not only selecting the best technologies, but thoughtful and “upfront” change management in the process.
The content of this article is intended for informational purposes only. The views and opinions expressed in this article are solely those of the individual author and do not reflect the views of Everest Re Group, Ltd. (“Everest”), and its affiliated companies. Additional information about Everest, our people, and our products can be found on our website at https://www.everestglobal.com/.