cess of innovation and expect it to function seamlessly and produce good results.
Insurers can take advantage of their
network of risk professionals, including
underwriters, actuaries and claims experts. Imagine the innovation capability
that emerges when these professionals
seamlessly collaborate as a team with
marketing, data scientists, technology
American author Steven Johnson
wrote, “If you look at history, innovation
doesn’t come just from giving people incentives; it comes from creating environments where their ideas can connect.”
This is an essential requirement for innovation to work.
While a collaborative culture may be
less tangible, innovation can also be made
concrete through an innovation laboratory or similar structure within the organization to support and drive innovation
along a development life cycle.
A lab could be structured to be nimble
— failing early and fast on ideas, and running quickly through rapid prototyping
to develop and launch ideas that work.
Teams of people would be tasked to take
ideas submitted by employees, customers
or other stakeholders for consideration
by the lab through a structured process
to quickly determine viability and potential for success. This process will include
failures, and that’s okay. Truly innovative
organizations embrace failure as simply
a step along the path to success, learning
from those failures and applying lessons
on successive efforts.
Another myth about innovation is
that it is always about something new
or totally disruptive. While these kinds
of solutions have strong track records of
success in product and service innovation (remember books and music before
Apple and Amazon?), disruption is not
a requirement for innovation to work.
Finding an innovative approach to how
an insurance company internally handles
claims or prices risk has the potential to
bring success to the company as much
as an innovative new consumer-facing
product. Innovation can be incremental
as well as disruptive, but it must be part
of the culture before it can bring success.
There are huge incentives for insurers to
embrace innovation from both a cultural
and strategic perspective. Insurers willing
to try something new can leverage exist-
ing resources to unlock their competitive
advantage. But first they must fully under-
stand the innovation mindset and see the
opportunities from that perspective.
Susan Cross is a Fellow of the Casualty
Actuarial Society and the executive vice
president and Group Chief Actuary at XL
Catlin, where she has worked for the past
17 years. Aaron Halpert is an Associate of
the Casualty Actuarial Society and Principal
at AMHAdvisory LLC, an actuarial consult-
ing practice he established in 2012. He was
previously with KPMG for 27 years. Brad
Monterio is a managing director for Colcom-
group, Inc. He serves on the Board of Direc-
tors for the Casualty Actuarial Society and
the Institute of Management Accountants.
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