There is so much talk about the need for the insurance industry to innovate. More and more emphasis is being put on innovation. Heck, even AM Best has decided that it needs to assess innovation as a part of its evaluation protocol.
Executive SummaryIn a business environment where everyone seems hell bent on change, there are some basics that can help ensure that whatever changes an organization makes are for the better. One key methodology that encourages creativity and meaningful differences is what is referred to as design thinking. Simply put, design thinking is a philosophy, methodology and practical approach to creating improvements that are designed from a customer needs perspective. The customer might be an insured, producer, underwriter, claims person or any other business person. It just depends on the focus of the solution.
I won’t offer my reactions to AM Best’s decision to pursue an innovation score. However, I think we can all easily agree that our industry has a great deal of work to do in order to meet the consumer expectations of our insureds, producers and employees.
Many insurance companies are attempting to instill more innovation into their organization. But innovation is worthless unless it changes and improves things. And there is no innovation without action.
To be successful, an innovation process must deliver three things: superior solutions, lower risks and the cost of change, and employee buy-in, wrote Jeanne Liedtka, a professor of business administration at the University of Virginia’s Darden School of Business in a 2018 Harvard Business Review article. (“Why Design Thinking Works,” Sept-Oct 2018 edition of Harvard Business Review)