Peter Hancock
Peter Hancock

Here’s an innovation you may not have heard about in the insurance world: client councils.

AIG President and CEO Peter Hancock said that his company forms and hosts client councils in order to leverage innovation insights from its 90 million global customers. The goal is for American International Group and its customers to share insights directly, and figure out what worked, what didn’t and what can be done differently to improve the customer experience, Hancock said in the Harvard Business Review white paper “Embracing Disruption with Innovation.”

Of course, AIG also has a chief science officer slot (created by Hancock before he became CEO), to lead researchers that work with academic institutions, think tanks, and other research groups with a goal of improving business processes and finding new ways to innovate. This, along with review and analysis of claims paid, also helps the process, Hancock said.

Businessman pointing to word innovation against spiral of shiny“We don’t have to be the source of all the good ideas,” Hancock is quoted as saying in the HBR white paper. “We just need pathways to collaborate with the best thinkers in the world, whether they be Nobel Prize winners – we’ve been collaborating with three in the past five years –or the very broad and diverse span of clients we do business with, which range from 98 percent of the Fortune 500 and the equivalent in Europe to small farmers in India.”

Hancock said innovation doesn’t have to be life changing. It can combine existing products, for example, in new ways that help customers.

AIG is in the midst of a massive restructuring effort that includes plans to return at least $25 billion to shareholders through 2017, funded, in part, by selling off assets, reinsurance transactions and debt refinancing.

For more on Hancock’s ideas, check out the whole Harvard Business Review white paper here, which includes accounts and anecdotes from other industries.

Source: AIG/Harvard Business Review