While many insurers recognize the new world of opportunity that innovation brings, many seem reluctant to be the first out the door.
Not entirely surprising, most of organizations responding to our survey reported that they lack the hallmarks of an innovative organization such as dedicated budgets for innovation, formal strategies, executive-level support and performance metrics.
In fact, just 32 percent of respondents said that they consider their organizations to be ‘first-movers’ when it comes to innovation, while 40 percent seemed content to be ‘fast followers’, and more than a quarter reported they had no discernable philosophy.
With the majority of respondents increasingly concerned about the threat of new entrants and more innovative competitors, it is somewhat perplexing that few seem willing or interesting in seizing the ‘first-mover’ advantage. And in fact, our interviews uncovered two distinct camps of thought on this.
One multinational firm interviewed told us “To us, this is a matter of survival; those that are fasted to adapt to these trends will have competitive advantage.” While another told us they are “intentionally commercializing innovation at a more measured pace.”
Mid-sized firms demonstrated a keener appetite for innovation, and were 25 percent more likely than their smaller peers to categorize themselves as first movers.
For the most part, the research found, few insurance organizations demonstrate the hallmarks of an innovative organization, and as such, few may currently ready to sustain innovation over the long-term. Many struggle with executive support, and fewer than a quarter said they have a Chief Innovation Officer or other executive-level position dedicated to innovation. Furthermore, less than a 25 percent say they use data and analytics to help drive innovation programs and decisions; while one-in-five admit they have no formal way to measure their return on investment for innovation.