Innovation comes in two flavours: Enablement and Disruption.
Insurance incumbents are much better at Enablement as often it just requires an evolution of the existing model. The people running insurance company are not at all stupid. Indeed they completely get the need to innovate. However, they are driven by quarterly targets and as true innovation is usually strategic, they rarely have the opportunity to reap the benefits of long term strategic change.
Disruption on the other hand needs wholesale change to business models. Often this is a step too far for corporations with a lot to lose to change the status quo too radically.
The key is to build a Technology Capability that is agile and has every functional capability built in, rather than building a Point in Time, hard coded system for today’s needs.
Bob Mozeika is spot on with what he says…
Technology is viewed as a daunting disruptor by some and a huge opportunity by others. One thing’s for sure – it cannot be ignored. Fearing or snubbing technology will push insurance companies into the slow lane – something they cannot chance in a world of ever-changing risk, according to Munich Reinsurance America’s innovation executive Bob Mozeika. “My main piece of advice is for insurance companies and brokers to start small,” he said. “Insurance professionals are naturally risk adverse. Start small with technology and concentrate on one or two areas that will help the whole chain.