I blogged earlier this year about how insurers seeking to innovate often think first about acquiring tech-oriented startups. Research we conducted last fall indicates that P&C insurers are planning to spend an average of $47 million in digital investments over the next three years while life insurers plan to invest an average of $40 million.
As I pointed out, there are other paths to innovation in addition to buying startups. Insurers are participating in innovation incubators that help identify startups with good ideas and provide the encouragement, advice and funding these founder-entrepreneurs need.
The Fintech initiative – now under way in New York, London and Hong Kong – is a good example of how such innovation labs can bring needed ideas to market. In the New York program, insurers Guardian and New York Life partner with other financial services firms to provide insight and advice. The New York program is a partnership between Accenture and the Partnership for New York City.
In a recent issue of Outlook, Accenture’s online journal of high-performance business, my colleagues Kevin Prendeville and Ajay Chavali talked about the benefits of bringing digital to the innovation process. They noted that social media, for example, can help companies collect customer ideas for product improvement, but also their feedback on product performance. Analytics and big data can help insurers track how customers are using their products, including whether some features are actually popular. This input can be used both for new product offerings and for improving existing products.