In late 2012, Accenture surveyed 519 managers within large US, UK and French companies about their attitude toward innovation—32 were insurance companies. The research gives us a great window into how insurers see innovation, and provides a basis for comparison with the total sample. See my previous blogs for an analysis of the cross-industry results.
Looking at the results, one can draw three main conclusions:
Innovation is important to insurers, just not that important. Insurers are less likely to list innovation among their top five priorities, for example, and only 38 percent plan to increase their funding of innovation, despite the fact that 84 percent said that their long-term success depends on innovation.
Insurers have low expectations when it comes to innovation. Only 16 percent of insurers think their innovation delivers competitive advantage, and a similar percentage believes it is aimed at market disruption. Nearly half (46 percent) say they have become risk-averse.
Insurers have begun to put in place formal structures to deliver innovation. It’s not all bad news. Already half of the respondents have a chief innovation officer in place and 63 percent have a formal innovation system in place. Lagging somewhat, only 31 percent have a formal innovation organization.
One example of a company that understands the benefits of a good innovation process is Mobiliar Insurance. It received the Swiss Insurance Innovation Prize (co-sponsored by Accenture) this year for its innovation process—specifically, a specially developed tool, InnoBox, that collects and manages innovative ideas.
Overall, the state of innovation in insurance is rather a mixed bag. If I had to summarize, I would say that insurers tend to see innovation as something that is discrete and focused on product innovation—rather than something that is integral to the way they do business and that could generate breakthrough ideas. As I’ve argued already (and see Why “low risk” innovation is costly), this kind of approach is very dangerous in the long term.
The research also suggests some answers, which I’ll explore next time.