SMA Report: Focus, Momentum Expanding around Innovation in Insurance
Staff Writer | November 14, 2014
Strategy Meets Action (SMA) a leading insurance strategic advisory firm, has just released a new research report, “Innovation in Insurance: Expanding Focus and Growing Momentum” that highlights the continued progress in and around innovation with expanding focus and accelerating momentum. The report notes that insurers' investments in technology are focusing around the modernization of core systems, recognizing it is a foundational requirement for innovation and table stakes for entry into the leader positions in the market.
In addition, the research indicates that building momentum for the innovation journey is being fueled by the insurers' increasing willingness bring in outside-in views by engaging open innovation and developing an ecosystem of outside resources.
"A new future is rapidly unfolding, and the pressure to innovate is on, as reflected by the significant number of insurers focusing on innovation," says Denise Garth, SMA partner. "In today's environment of fast-paced change, an insurer’s commitment to innovation must never cease, must never pause, and must always keep a sense of urgency. Each and every day, insurers must recommit to their innovation journeys and their innovation cultures, to gathering outside-in views, and to avoiding falling into operational traps."
The report highlights and discusses the following:
- Innovation leadership and organizational approaches take many different forms for insurers, ranging from dedicated departments to departmental or ad-hoc teams.
- Nearly one-third of insurers have their strategy or R&D leadership/areas lead innovation. SMA believes this reflects the resurgence of strategy and R&D efforts to provide an enterprise wide approach for innovation that maximizes the strategic impact and value of innovation initiatives for the organization's Next-Gen Insurer vision and strategy.
- The shifting landscape of the influencers of, threats to, and competitors in the insurance industry has reprioritized innovation drivers, with enabling growth (42 percent) and profitability (30 percent) moving to the top.
- A bigger shift has emerged, reflecting the demands of the digital revolution and outside-the-industry influencers that are increasing the focus on developing new products and engaging and strengthening customer relationships.
"Innovation continues to be a strategic and key initiative within the industry, gaining greater focus over the last few years due to the level of innovation from companies outside insurance who have strong innovation cultures and are impacting or entering the industry in various ways," says Deb Smallwood, SMA founder. "This is reflected in the majority of insurers that have focused on innovation for more than two years, and many for more than five years, highlighting the growing momentum in the industry that will delineate market leaders and movers from the rest of the industry."
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