Scary thought: What happens when the worlds of startups and insurers collide?

Scary thought: What happens when the worlds of startups and insurers collide?
Scary044Accelerators, incubators, hackathons and labs, oh my! There have been an increasing number of partnerships between insurers and start-up technology companies in the past year. It is an exciting time, full of possibilities and I don’t mean to pour cold water on the enthusiasm, but… What happens when fast-moving startups meet governance-heavy insurers? When faced with a joint decision, how will professionals who have spent a career avoiding risk reach agreement with their partners who seek out risk? To what degree should action plans be coordinated and how is that done if one group is using an agile development method while the other prefers waterfall? Do these differences really matter, or will the incentive to deliver something really cool power through such differences? It is time to ask this question, along with what is, and isn’t working, and what actions will improve results. Celent is excited to partner with Silicon Valley Innovation Center to assess the current state of innovation partnerships in insurance. We value your views would like to invite you to participate in a survey. Leave your email and I will send you a summary report. The goal of this survey is to accelerate insurance industry innovation / transformation by identifying effective partnering methodologies and processes. It specifically focuses on the relationship between incumbent insurers and start-up firms. It takes under 10 minutes to complete. Hope you will add your views: Click here to start

It’s no longer about “Why” innovate in insurance, but “how”

It’s no longer about “Why” innovate in insurance, but “how”
The opportunities and threats facing the insurance industry are forcing a change in the conversation around innovation in the sector. Celent has been tracking innovation in financial services for the last 18 months and we have detected a recent shift in interest. In 2014, insurers were exploring why they might need to invest in disciplined innovation practices. What is the next disruption that will change the industry? What can new technology offer regarding improved risk selection and pricing? Now the conversation is moving on to how to execute on innovation. How exactly are firms which are finding success in innovation executing their initiatives? What processes have they put in place that enable them to move beyond the theoretical and carry them into the realm of practical benefit? To respond to our clients’ needs, Celent is facilitating an innovation event in London on February 25, 2015: Making Innovation Happen in Insurance: Hedging Against the Future. The programme will focus on how to deliver innovation in an established insurance franchise. Our design team has developed an agenda which combines research and experience and will provide attendees with practical advice on how to make progress with innovation. The programme includes a mix of first-hand accounts from firms who have achieved success as well as hands-on activities that simulate typical decisions innovative firms face. In this and subsequent blogs, we will give you a look at the agenda in detail. The first portion of the day will provide a look at the current state of innovation in the UK market. This will include data from a survey to benchmark how insurers in the UK market are structuring their innovation initiatives. Celent research finds that success in innovation often entails establishing new types of partnerships that link emerging technologies with traditional insurance products. Sometimes, but not always, this involves direct investment in spin-off firms. In all cases, it involves a dynamic that extends beyond the usual vendor-customer relationship as companies co-develop new approaches to their markets. The second portion of the programme includes presentations from three start-up companies to explain how they are working with insurers to deliver successful innovation. In the final section of the day, we are very pleased to welcome Oliver Werneyer, the Head of Innovation at Swiss Re, to present a Practitioner’s Perspective. He will outline the journey his company has taken so far as they combine their company’s valuable experience with new operating practices. Oliver joined Swiss Re in 2012 and focuses on commercialising traditional life insurance concepts in the modern world of apps, social media and digital connections. His comments will detail how Swiss Re uses data analytics and consumer experience techniques to change the way people experience life insurance. More details are forthcoming on the sessions on measuring innovation and barriers to change, so stay tuned. Click here for more information and to register.

The Lion and the Mouse: Start-ups Pitch to Top Insurer

The Lion and the Mouse: Start-ups Pitch to Top Insurer
One of the common behaviors of successful innovative companies is establishing creative partnership arrangements. These relationships are not traditional supplier/buyer arrangements (zero sum games) but are mutual agreements that combine deep subject matter expertise and new technical capabilities to produce unique and valuable solutions. I witnessed an event this past week that demonstrated partnership-building in full force. Eight start-up companies pitched their solutions to one of the largest insurers in the world. It was inspiring to see the interplay between the very different perspectives, and encouraging to watch the participants struggle, and most times overcome, hugely different communication styles. It reminded me of the Aesop fable about the lion and the mouse, the moral of which is that size is not an indication of value. Each presentation followed the same general structure. The founder / CEO / CTO of the start up reviewed the key functions and value propositions of their solutions. In most cases, about half way through, the audience members from the insurer would begin to ask what I call use case questions. “Does this mean we could use your solution to do ABC?” and “We have a problem with doing XYZ. How would your system approach this?” I was struck by how natural it was for the subject matter experts to quickly apply the technical information to their current challenges and how easily they could imagine future capabilities. I think that there were several reasons for the success of the session. First, this insurer’s innovation team has been in place for multiple years. Over this time, I know they have worked hard to engage with the “innovation evangelists” in the organization. This meeting included the right “curious minds” and was a manifestation of their advance work. Another reason is that the facilitating company which selected the start-ups chose carefully and coached the participants regarding presentation messaging and delivery. There was just enough tech talk and a good amount of insurance-specific application examples. Finally, I think the immediate translation into use cases signalled pent-up demand from the insurer. Their attendees obviously have already been thinking in specific terms about how technology can help them better run their businesses. This forum provided them an outlet for expression of those thoughts. The session was a well-planned and well-executed example of innovation execution – the type of activity that Celent calls Deliberate Innovation. Kudos to all involved for demonstrating how to operate in a market of exciting possibilities!