Insurers of All Sizes Looking Towards Innovation

Last month, I presented the keynote at ISI, Inc.’s annual conference in Toronto. The conference consisted of a full day’s agenda, covering everything from making better decisions with business intelligence to seamless data integrations to cybersecurity and data protection. There were a handful of roundtables throughout the day. The presentations were impressive; the advice, well-taken.

The keynote that I presented sourced Novarica’s wealth of research, survey results, and thought leadership. I covered trends, innovation, and value in emerging technology. Some of the interesting feedback I received after the presentation centered around two areas: innovation and technology opportunities for small insurers.

Innovation is likely to become part of AM Best’s rating formula. This is creating a stir among insurers big and small. Many insurers are taking one of four approaches to achieve their innovation goals.

The first approach, education and evangelism, relies on creating and sharing ideas without much ownership or accountability. The tactical goal of this approach is to ensure that the organization knows what innovation is—and what it isn’t. Other carriers are approaching innovation by forming research and development arms to focus on prototyping and pilots. Some larger insurers are investing external organizations with the hope that it will bring innovation into their organizations by way of partnerships and knowledge transfer. Another approach is for carriers to create an expert data science team that examines internal and external data sources for meaningful insights.

ISI does well to focus its future on smaller and midsize insurers seeking a modern full suite platform to help transform their business in distribution, underwriting, or claims. However, smaller and midsize insurers posed plenty of questions to Novarica: How they can achieve their innovation goals or leverage technology with a limited budget? How can they leverage data when their own is small in scope? How can a small specialty insurer be fast and flexible in support of an ever-changing business model? How can a small insurer achieve innovation with fixed budgets and resources?

These questions are all addressable, and answers vary depending on the type of insurer, its business and distribution model, and its business goals. What is critical is how those answers will help insurers sell more, manage risk better, and cost less to operate. These are where the value of technology is for insurers, regardless of size.

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