Digital disruption has reached the commercial insurance industry. Digital technologies are being harnessed in new ways that fundamentally alter value propositions and enable new business models. Many industry incumbents will need to rapidly transform themselves in order to survive against a new breed of digital insurance competitor. This will require re-evaluating not only how insurance companies do business but also how they approach the process of innovation.

Executive Summary

Barriers to rapid innovation in large insurance companies including overburdened innovation teams, inflexible and fragile systems, traditions of collaborative decision-making and siloed initiatives are daunting, according to Rob Norris, a 20-year veteran of Colorado workers comp insurer Pinnacol Assurance. Here, Norris explains the company's creative solution, an in-house MGA coupled with a human-centered design lab that he now leads as CEO.

In the experience of one carrier, Pinnacol Assurance, a new organizational approach—the creation of a human-centered design lab that operates as an in-house managing general agent—proved to be a powerful tool for rapid, transformative innovation.

Pinnacol Assurance is a $624 million writer of workers compensation insurance in Colorado. Although business results in recent years had been strong, the company was concerned about keeping up with rapidly changing expectations of small business owners, who increasingly want an Amazon-like experience when buying insurance. And Pinnacol saw that new digital insurance distributors appeared ready to meet these expectations.

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