Perhaps better known as a showman than an entrepreneur, P. T. Barnum was nevertheless successful in a range of businesses and dedicated to the idea that there was a customer born every minute. But while insurers may admire his optimism about an endless supply of potential buyers, they might consider applying his concept to their product portfolio instead. By making sure that a new product is “born every minute,” insurers could be better placed to take advantage of new revenue opportunities. Indeed, at the recent Future of General Insurance event in London, product innovation was under scrutiny. Already “proved out” by other markets, such as travel—whose agencies have bundled valuable services that steer customers away from the online cost cutters—insurers could benefit from running flexible systems that can be quickly configured to offer new distribution models and services.
For many, the move to innovate may be a case of how rather than when. As our survey among 71 senior insurance executives found, one in five large companies believes it is trailing competitors in the ability to deliver new products to market. Perhaps it is the case that the more complex legacy environments, often found in large companies, prove to be a barrier to their ability to introduce innovation. Indeed, legacy is a known challenge: although the survey found more than half (54 percent) of respondents said that legacy systems are serving participants’ needs well today, this figure fell to 42 percent in three years’ time.
Shaking up the insurance market with next-generation business models is not something new. From Direct Line launching in the mid-1980s as the first telephone insurer in the United Kingdom to the insurance aggregators and comparison websites that have evolved in last 10 years, we’re seeing industry transformation. For instance, more recently, Bought By Many is having a dramatic impact not only on how people buy insurance, but also how insurers can work with customers. Set up to bring people together with similar insurance needs, and use the group’s collective buying power to negotiate offers on insurance that would not be available to individuals, the company has gone from strength to strength.
I believe that to be fleet of foot and regularly refresh the product portfolio, insurers need to be proactive in bringing new offerings to market, not reactive to demand. To achieve this, their systems need to be flexible, with codeless configuration and end-to-end capabilities. Don’t hesitate to contact me if you would like to talk more about product innovation.