Other parts of this series:
- Innovate or downscale: the insurer’s dilemma in the digital economy
- It’s time to challenge the old orthodoxies that are stopping insurers from becoming innovators
- Here’s how insurers can transform themselves into innovators
- These digital technologies need to be on the watch-list of every insurer
- Insurers must learn the golden rule of innovation – collaboration is crucial
- Experience required: Insurers need to delight their employees as much as their customers
Insurers need to find the right partners that will help them foster the innovation that will be vital to their futures.
Digital technology is fueling unprecedented innovation in the financial services industry. Scores of smart new products and services are coming to market. Many of them rely on advances in technologies such as telematics, analytics, intelligent automation, robotics, blockchain and digital authentication.
Successful innovation, however, requires more than just clever ideas and powerful technology. Most important is a willingness and ability to collaborate. The companies that succeed in the emerging digital economy will be those that forge smart partnerships. They’ll pool ideas from a wide variety of sources, refine and test prospective products in tandem with key partners, and roll out new offerings across ecosystems populated with complementary service providers.
Innovation is not an option for insurers – it’s a necessity. Insurance providers, as I mentioned in an earlier blog post, have to become innovators to fend off increasing competition and build sustainable businesses in the digital economy. To accomplish this, they need the right partners. Prospective allies can be found right across the value chain.
At a recent Digital Insurers Network (DIN) gathering, convened in Paris by Accenture, delegates identified a variety of potential innovation partners. They include:
Customers: Customers are no longer simply consumers of products and services. They provide valuable feedback and insight that helps companies improve and diversify their offerings. Toy manufacturer Lego, for example, pays its customers a 1% royalty for innovative ideas it turns into new products.
Employees: Many large firms, including insurers, are encouraging their staff to put forward innovative ideas that help the organization improve. Some, such as AXA, are staging regular hackathons and design contests for employees and helping staff develop promising projects.
Start-ups: Unencumbered by past business practices, start-ups and incubators are an ideal source of innovative thinking about how to tackle challenges and opportunities in the insurance industry. Big insurers such as Allianz, American Family, Aviva, AXA, MassMutual and Ping An, have earmarked substantial funds to invest in promising start-ups that are building insurance solutions.
Think-tanks: An increasing array of business forums and trade groups, such as the DIN and EFMA, offer insurers the opportunity to exchange ideas and insights about the impact of digital technology and to learn from each other’s successes and failures.
Universities: With only 2% of graduates interested in careers in insurance, major carriers need to raise their profile in universities as well as tap into their innovation resources. Financial services group Santander is partnering with more than 1 200 universities in 20 countries. Its support of these institutions has significantly raised its standing among young people across the world.
Ecosystem partners: The rising importance of digital ecosystems is propelling insurers into alliances with new partners and technology service providers. AXA, for example, recently announced an ecosystem alliance with Chinese digital giant Alibaba and its affiliate Ant Financial Services. The potential of such partnerships to foster innovation through the sharing of information and insights is huge.
In my next blog post, I’ll discuss how insurers can create an innovative workforce.
If you would like to learn more about the DIN, please email email@example.com.