I’ve argued in my previous blogs that insurers have some compelling reasons to take a more expansive view of innovation, and a need to make it work better for them… or risk everything in the long run. I’ve also suggested (based on research) that the key to building a successful innovation program would appear to be a formal system for innovation.
To end off this series with some solutions, here are the characteristics of a formal innovation system that delivers real business outcomes. These insights are based on Accenture’s long involvement with innovation as a concept, and our in-depth work with clients across the global insurance industry:
- Run innovation as an end-to-end value chain emphasizing speed and flexibility. Insurance product life cycles are shortening, and speed to market has become a critical success factor.
- Move from product to business innovation, integrating elements of product, service, technology, networks and personalization. New products and services must be backed up by a business model that delivers a personalized, unique customer experience.
- Apply risk management practices specifically tailored to innovation to identify future opportunities and to properly evaluate your innovation portfolio. As their innovation projects proliferate, insurers will need to measure the concomitant risk more accurately—luckily, they are risk management experts.
- Leverage the digital power of big data and analytics, as well as social media, to integrate the “voice of the customer” into the development processes and drive a high level of personalized experience. Real-time insight into consumer trends and preferences can give insurers the edge.
- Pursue frugal innovation both to capture middle-class consumers in emerging economies and also to disrupt markets in developed economies. Whether your company operates in developed or developing geographies, frugal innovation has a role to play. Reducing product cost and complexity remains important in emerging markets and can be used to disrupt developed markets.
- Develop an innovation process focused on results. While exercising sound risk management, insurers should focus on piloting potential innovations quickly, and then fine-tuning or terminating rapidly.
Read Innovation: The opportunity for insurers for more detail on these characteristics.