Insurers seem to be caught in the innovators dilemma, facing complex challenges related to capability, capacity and cost.
With so much change already underway across the sector, few insurers seem to have the time or bandwidth to take on new projects. In fact, 79 percent of respondents globally told us that they were already doing a juggling act just to keep up with their core requirements. Talent challenges also seem to be holding back insurers from greater innovation with 74% saying they lacked the core skills and capability to drive innovation. And, with just 39 percent of respondents claiming to have a dedicated budget for innovation, it is not surprising that 71 percent cited lack of investment and rising cost pressures as key barriers to innovation.
In response, insurers seem to have tried a wide variety of strategies and initiatives to help improve innovation across the enterprise. From training programs designed to enhance idea generation (36%) to widening their innovation ecosystem through partnerships with academics, FinTechs and other third parties (43%). Others have changed their business models and organizational culture to drive change, including creating 100 percent dedicated innovation teams.
For example, one global Life insurer we interviewed told us “My group is not an R&D lab, it’s a catalyst organization. We don’t get funding to do experiments and pilots but instead are focused on working with business units on specific business challenges where we can apply our tools and methodology to their diversity in order to come up with creative ideas that deliver value to the customer.”
While a global reinsurer told us, ‘we’ve deliberately decided against running new cultural change programs preferring instead to follow a more ‘fact-based’ approach to communication and employee engagement around innovation.”