Traditionally, one of the biggest challenges for innovation in insurance has been the natural resistance to new concepts and working practices. By the nature of their business, insurers are risk averse.
Understandably, deploying new processes is not easy – not only the need to undertake due diligence, but also as with any business change transformation process, to expose the true value improvement to their services. This can involve in-depth cost benefit analysis, so that ROI is fully understood and that change is not being implemented for the sake of change, but ultimately to improve their customers’ experience and their own bottom line.
Many firms spend the majority of their time defending against disrupters instead of directing their energy towards creating value for their customers. Whether disruptive or incremental, innovation must be a part of the culture before it can bring success. Organisations should consider how they can work with or acquire innovators to improve their offerings.
Another major challenge is the regulation and red tape surrounding the industry. Insurers are often reluctant to embrace new products, services and technologies out of concern for navigating complex compliance and licensing requirements. But companies like Uber have proven disruptive technology can overcome obstacles, when there is motivation.
Recent events have made it quite evident how innovation can quickly reach the front line and how teams can be trained and upskilled at pace. Innovations are being rolled out across industries in a matter of days and weeks as opposed to months and years.
The coronavirus pandemic is accelerating digital transformation throughout all areas of society