Selling risk – how innovation can be brought to the front at insurers

SELLING RISK-

how innovation can be brought to the front at insurers

Jay Chitnis, Senior Business Consultant at Endava, looks at how a traditionally riskaverse industry can start to embrace innovation and keep evolving.

Innovation has been one of the key topics of the last decade. It seems like every company, whether they’re working in technology or not, has to brand itself as innovative, making this the very cornerstone of their marketing and sales outreach. But, with this drive for innovation, are we at risk of it becoming an empty buzzword, with no true meaning, or even worse, could innovation simply become a justification for spending money on endless projects with no true goal or definition? How can we get back to the real meaning of the word, making sure that companies are truly remaining at the cutting edge and continuing to push boundaries?

Today’s consumers and businesses expect more. They’re not content with inefficient processes that simply ‘get the job done’. Instead, they’re looking for their service providers to bring renewed experiences that are simple and intuitive. If a company cannot provide a dynamic and evolving sense of innovation then they run a very real risk of both losing existing customers and failing to win more and grow their customer base. This can be fatal for companies but, if an entire industry is perceived to be stagnating, then this can mean that people are hesitant to engage with it unless they have to, losing sight of the actual benefits and importance of the sector and damaging its reputation as a whole.

In fact, the insurance sector makes for a very interesting

case study. The sector has a reputation for being ‘old’, ‘traditional’ and even, sometimes, ‘stuck in its ways’. What’s more, insurance can be seen by its users as a ‘necessary evil’, rather than a positive force. While there have undoubtedly been innovations, such as telematics in the car insurance industry and the first moves to embed insurance within other services, the industry has been slower than others to embrace innovation.

So what are the barriers? At the heart of the matter is a very simple irony. For a sector that deals so heavily in risk, it’s actually very risk averse. Nowhere is this clearer than in the struggle over innovation. If innovation is incorrectly positioned as an impetus or method for change without actually being tied to real objectives that show value then it can become linked to a strategic ambition rather than connected closely to real, tactical milestones, increasing a feeling of risk. Without tangible outcomes that prove the concept as the work progresses, the actual benefits can feel cloudy and unclear. This is often the case when a new strategy is put solely in the hands of innovators and success is expected but failure will damage the whole strategy. The insurers that are able to be successful innovators are those that see it as a way of defining strategy—taking risk first and renewing processes or embracing new tech to test a strategy and then setting key, tactical milestones to keep proving the concept.

Ultimately, innovation Directors must be able to articulate the objectives and set a proper timeline for delivery, as well as demonstrate the benefits and value. In industries like insurance, where risk is not always well-received, if a new project isn’t clear in its deliverables and showing real value—and these aren’t communicated—then it can be very difficult to get projects off the ground. If timelines are long and objectives aren’t clearly defined, it’s not hard to see how board members might want to stick to business as usual, particularly when insurance customers are already essentially a captive audience—insurance is needed throughout much of our daily personal and corporate lives.

At the same time though, innovation is critical to keep industries current and deliver real value to their customers. A lot relies on the people that are delivering projects. Innovation Directors and leaders must be prepared to talk to the concerns that others may have. They must also be doers and able to scrub in and lead the way, particularly when working closely with sales teams that will have technical questions and need proper guidance on how innovations should be sold and implemented. They must also carefully consider their projects and methodology and set clear strategies, goals and achievable milestones to prove the project on an ongoing basis.

For anyone seeking to innovate, approaching such projects as ‘digital acceleration’ may be the key. Digital acceleration seeks to keep companies at the cutting edge in the long term, while also being agile in the short and delivering value as fast as possible. These projects may be multi-year but at their heart, they set achievable, bitesize milestones, able to pivot to meet evolving needs and the demands of a rapidly-changing operating environment.

While it may not be possible to de-risk innovation entirely, properly defining and designing projects to more properly fit into an already-understood framework may help explain them and reassure risk-averse board members and investors.

Jay Chitnis, Senior Business Consultant Endava