What does it take to stimulate different thinking, spur imagination, and encourage novel approaches that deliver new levels of business value? Insurers are proactively striving to discover just that. SMA has conducted recent research into what motivates innovation in the insurance industry. More than a third of the insurers that participated in a recent SMA survey reported that they are directing investment toward major operational improvements. Many even have transformational game-changing objectives in mind.
Many question if innovation is really happening in the insurance industry. Outsiders may view insurance as a laggard industry, but naysayers should not be so quick to judge. According to a recent SMA research study, Innovation and Next Generation Technologies, insurers deserve much more recognition for their progress and success. The research shows that insurance innovation is indeed happening – innovation cultures are being cultivated, collaborative environments are being established, and next generation technologies are an important part of the whole picture.
There are three fundamentals that insurers must embrace to create and foster a climate for innovation within their organizations:
- Incent an innovation culture
- Create a collaborative working environment
- Leverage next-gen technologies
This blog addresses the first fundamental – incenting an innovation culture. The next two blogs will address how collaboration and emerging technologies set the stage for innovation.
Incent an Innovation Culture
Innovation comes from a desire and a commitment to constantly improve, to think differently, and to envision and enact change. The organizations of the future will increasingly depend on the experience, loyalty, and creativity of their employees in order to survive, compete effectively, and drive growth and profit. In a knowledge-based economy, insurers have to nurture innovation and motivation by shaping a culture that is performance-driven, yet open to new thinking, fresh approaches, and smarter decision-making. Leading insurers are actively watching and learning from both inside and outside the industry, by paying close attention to more than just the overall trends. They are studying how novel approaches and specific solutions are delivering business value.
For many, the quest for new ideas and the efforts to foster innovation and incent risk-taking often means shifting the mindset of the organization. Creating a sense of common culture that embraces rethinking, reinventing, and reimagining means going way beyond the employee suggestion boxes of the past. Insurers who are seriously cultivating a culture for innovation are taking an enterprise view and encouraging all employees to rethink the business at every level.
SMA research shows that 37% of insurers say they have already established a culture that is supportive of new thinking and risk taking. Well over half (55%) of insurers report that they are empowering teams and individuals to stimulate idea generation and innovation. And recognition programs that showcase innovation accomplishments are in place at 39% of the companies surveyed.
Innovation is vital to the insurance industry, and the leaders are taking bold steps to make sure they improve their competitive position and are not left behind. Innovation is the fuel that will keep the insurance industry not only viable, but healthy, moving forward, and keeping pace with the rest of the business world.
About the Author: Deb Smallwood, the Founder of SMA, is recognized for her expertise in investing in technology to influence competitive advantage in the insurance industry. She offers a fresh perspective on how business capabilities can be enabled to meet strategic goals. Exclusively serving the insurance industry, Strategy Meets Action blends unbiased research findings with expertise and experience to deliver business and technology insights, research, and advice to insurers and IT solution providers. Deb can be reached at firstname.lastname@example.org.