What is innovative today will be expected tomorrow. Here's how insurers can get there.
"What
is innovative today will be expected tomorrow," is a powerful insight
— and it came from one of the roundtable breakout groups during the
2013 SMA Summit
at the Mandarin Oriental in Boston on September 16. SMA hosted nearly
130 insurers and solution providers, who gathered for an all day summit
to listen, network, and share ideas on Innovation for Advantage:
Energize, Transform, Differentiate, SMA's theme for the 2013 event. The
day followed an energetic and dynamic schedule, with a mix of prominent
speakers, panels, conversational interviews, interactive live polling, a
roundtable breakout, and Q&A.
I opened the day by challenging the attendees to think differently about
innovation in their own organizations. I wanted to set the stage with
some compelling research results, demonstrating that innovation is
happening in a big way within the insurance industry. SMA research has
shown that a remarkable 87% of insurers say that innovation is occurring
at some level, and 20% have already established a strong innovation
culture in their organizations. The vast majority of insurers view
innovation positively and regard it not only as a way to develop big,
game-changing ideas, but also to make small incremental changes. I
shared SMA's 3 keys to embracing innovation and developing the changes
businesses want to see: they must energize, transform, and
differentiate. Next-gen technologies such as big data, analytics, and
mobile are here to stay. The day then featured guest speakers and panel
discussions, where the 3 keys to embracing innovation for advantage were
highlighted:
1. Energize — Formalize ideation within your organization.
In order to get the necessary energy behind an idea, invention, or
change it needs to be well structured. The morning sessions featured
industry experts from insurance companies where innovation has helped to
make significant impacts in their own organizations. For example, Scott
Good, Senior Director, Customer Innovations at Scottsdale Insurance
Company, suggested an organization might start with having an innovation
day where leaders listen to the needs of their customers and imagine
solutions to fit those needs and make their lives easier. He explained
that having a customer focus allows you to focus on needs first. He
challenged attendees to hold an innovation day within their own
organizations where they predicted the competitive landscape 18 months,
as well as three and five years, out. This may be challenging and scary
for some, he said, but in the end predicting and thinking for the future
will make you smarter in the long run and inform your decisions in the
present.
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[Smallwood's three elements of innovative insurers]
Janet Deskins, Chief Product Officer for TransAmerica, Life and
Protection, furthered the notion of sponsoring formal ideation sessions.
She talked about TransAmerica's innovation cafes, where employees of
all levels can gather and dream big about where they'd like to see
change. TransAmerica calls their employees "tomorrow makers" and
encourages them to "declare" ideation, providing a great example of an
insurer that has woven innovation and ideation into the culture of
everyday business. Janet then challenged the attendees to ask themselves
what it would take for innovation to succeed in their organizations and
to begin to work on creating that environment immediately.
2. Transform — Use new technology differently. Big data
and analytics are here, and the possibilities for using the data in new
ways are changing daily. Even so, this new technology will soon be
commonplace. The challenge insurers now face is to begin to look at ways
to use the data differently, whether it be to improve processes or to
better inform policy. I spoke with Doug Ross, Vice President and Chief
Technology Officer of Western & Southern Financial Group, about
precision-Driven Growth and Profit in underwriting. I introduced a new
concept in big data and analytics that the NFL is using to analyze the
40-yard dash in recruiting: Not only are they measuring the speed at
which an athlete completes the run, but they are now measuring and
gathering data on arm movement, rapidity and number of breaths, heart
rate, and even foot print patterns. The rationale behind the NFL's
collection of all this data is to better inform the large investment
they will potentially make in an athlete. They want the most information
possible before they sign a deal.
The same can be said of insurance's embrace of big data and analytics in
their underwriting processing. The Summit featured many transformation
best practices as well. Judy Haddad, EVP and CIO/CTO at Patriot National
Insurance Group, described the company's success in moving its claims
process from 110 steps down to 11 steps. The transformation success
resulted from involving every level of employee in the process, making
sure everyone understood what changes they were trying to achieve, and
including the solution provider in every step of the process. Judy
advised that in any transformation, you need champions and cheerleaders
along the way to applaud incremental successes. Dan Colarusso,SVP of
Insurance Operations and CIO for the Cypress Insurance Group, shared a
transformation success story of how they were able to automate
underwriting and renewals processes. The benefits, besides achieving a
significant cost savings (24 month ROI), were that agents now had
self-service opportunities. The key to achieving this transformation,
Dan explained, was through collaboration and involving all sectors of
the business in the change. Collaboration and listening are critical
success factors to achieving a large scale transformation, and in the
case of Cypress, are elements that have delivered exponential payoffs.
3. Differentiate — Look to other industries to gain advantage.
SMA Partner Mark Breading led a panel discussion on Customer Experience
with Hugh Anderson, Senior Industry Principal, SAP Financial
Services/Insurance; Brian Piccolo, Director, Digital Strategic Services
at Liberty Mutual; Simon Thompson, Global Director of Commercial
Solutions at ESRI; and Scott Good of Scottsdale Insurance. The panel
shared insights into the importance that the customer plays in
innovation and making change, and how customers base preferences and
expectations on other industry standards. Mark opened the discussion by
noting that insurers can look to other industries for innovation
examples, but must also recognize some of the unique characteristics of
the insurance industry. He used the example of movie theaters going
upscale by adding power reclining chairs or offering restaurant-style
dining in the theater. The result is a completely transformed movie
going experience. So too, can insurers, even with complex products,
complex organizations, and complex customers, make small changes to
innovate and gain advantage. The panel members confirmed Mark's
assertion that small changes can quickly become the standard or
customer/consumer expectation. In addition, the panelists stressed the
importance of research to the process. Research is critical for
understanding the data and information your organization is already
gathering, as well as gaining competitive advantage.
So, until next year, continue to explore the possibilities. The SMA
Summit is a one-of-a-kind event. Where else in the industry can industry
leaders from both business and IT gather with their peers and solution
providers in an open, honest format and discuss the most pressing issues
of the day? The Summit will continue to push the boundaries of
traditional insurance events and begin to offer sessions throughout the
year where insurers can share and exchange information about innovative
solutions. SMA will continue to honor the robust discussions held at the
Summit by continuing the dialogue all year through social media, our
research, our Insurers Forum, and continued webinar opportunities. This
will all be brought to new heights at the 2014 SMA Summit, where the
theme will be "The Power of Innovation and Transformation."
http://www.insurancetech.com/3-models-for-the-insurance-innovation-process/a/d-id/1314801?
