As insurers seek inspiration to drive innovation, it makes sense to turn to modern-day tech titans to find useful ideas that might be adapted for the insurance industry. Innovation is the lifeblood of business growth and health. Consider that 43 percent of executives told PwC that innovation is a “competitive necessity” for their organization, and 93 percent said organic growth through innovation will drive the greater proportion of their revenue growth.
The evidence for the efficacy of innovation is most apparent in the meteoric rise of a handful of technology companies like Apple, Facebook, Amazon and Google. In this article, we’re going to highlight three important lessons that insurers can learn from the current crop of tech leaders and examine how they might be applied to insurance.
Simple Design That Starts With People
Apple is the most valuable company in the world today. The consumer electronics giant has rolled out some of the most beloved devices of the last few decades, but it has never lost sight of the vision established by Steve Jobs. He believed in a symbiosis between humans and machines, so everything was designed to be intuitive for people to learn to use; elegant and desirable to hold; and, perhaps most importantly, simple and seamless.
A customer-centric approach that considers and anticipates the needs of the end user foremost is an applicable concept for insurers. We should be offering a product range that’s easily comprehensible and digestible for customers. From identifying the right level of coverage to making a claim, targeting customer pain points and creating a structure that’s accessible, intuitive and simple is a win-win for everyone.
Striking Partnerships and Building an Ecosystem
Facebook recently surpassed two billion active users, and it is just 13 years old. One of the main ways that Facebook has managed to grow so fast and stay ahead of the social media pack is because of its willingness to partner with or acquire other organizations. Enabling you to use your Facebook credentials to log into other sites and apps was a genius move. Acquisitions like mobile messaging platform WhatsApp and virtual reality pioneer Oculus show a willingness to go beyond company walls and take risks to secure huge innovation injections. Enabling users to buy services and goods through Facebook is bridging the platform’s success with that of countless other businesses.
If insurers really want to innovate, then they need to look beyond their internal capacity and identify innovative service providers with whom they can partner. There’s also scope to drive the adoption of IoT devices like smart smoke alarms, fitness trackers or telematics devices for vehicles through partnerships with the manufacturers. GM’s investment of $500 million in ride-hailing company Lyft is an example. Partnerships like these almost seem counterintuitive at first glance. As companies grow larger, they typically struggle to innovate, so building an ecosystem is a good way of securing a fresh supply of new ideas and new products or services to co-market.
Embracing Failure and Learning From It
Google and Amazon are hugely successful companies, but both have had extremely high-profile failures. The social network Google+ quickly became the butt of many jokes, and Google Glass, despite heavy media rotation, fizzled out. But who could’ve imagined that a search engine company would go on to become a leader in self-driving technology? Google takes the long view and has plenty of strategic patience as it goes about diligently mapping and analyzing data on everything it does.
After the Amazon Fire phone flopped, CEO Jeff Bezos said: “I’ve made billions of dollars of failures at Amazon.com. Literally. None of those things are fun, but also they don’t matter. What matters is companies that don’t continue to experiment or embrace failure eventually get in the position where the only thing they can do is make a Hail Mary bet at the end of their corporate existence. I don’t believe in bet-the-company bets.”
The lesson for traditionally risk-averse insurers is that the big successes don’t come without a tax to pay for those painful failures along the way. You must experiment, take risks and be willing to fail in order to truly innovate. Whether you commit a budget to a pilot program for a new line or take a bet on an emerging technology and it fails, make sure that you learn from it. Collect as much data as possible on every experiment and analyze that information to extract insights.
Innovate or Lose
When KPMG surveyed 280 insurance executives, more than 80 percent said they believe their organization’s future success to be closely tied to their ability to innovate ahead of competitors. The tech giants teach us how to think beyond homegrown silos. Taking inspiration from some of the broad concepts that have enabled the new wave of tech companies to dominate the business world could be the innovative spark that insurers need.