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What does innovation mean in insurance technology today?

 


At the 2016 IASA conference, held in San Antonio, Texas - Novarica, Erie Insurance and ValueMomentum collaborated to present a session titled Digital Journey: From Strategy to Implementation. Matthew Josefowicz, President/CEO Novarica, a widely-published and often-cited expert on insurance and financial services technology, explains what true innovation really means that drives digital transformation for P&C insurance.

Why is digital more than mere technology update?

P&C insurers have come under intense pressure to innovate in order to sustain their businesses and thrive in the digital era. By not comprehending the true essence of digital innovation, the insurers’ CEOs, CIOs have a general tendency to buy off-the-shelf digital technology solutions in a hurry to make up for the lost ground due to digitization. This shortsighted approach could potentially put insurers’ digital strategy and IT investment at risk. Putting this into context, Matthew Josefowicz quoted in the session, ‘when companies are talking about digital innovation, more often than not, they are talking about tactical innovation’. Tactical innovation can only help insurers upgrade technologies of old business processes, which happens in silos rather than taking up innovation as an organization-wide initiative. The focus of tactical innovation is basically overhauling individual technologies within the organization.

Matt went a step ahead and added that the disruptive digital startups are not entering the marketplace with the intent to fix broken business processes with technology. On the contrary, they are adopting strategic innovation keeping long-term business prospects and building their business processes enabling digital technologies with the core objective to provide modern experiences to their customers. However, tactical innovation will still be required along with strategic innovation to crowdsource good ideas and manage IT effectively, but it is the customer experience viewpoint that has the potential to lead to true innovation in digital.

Commit to do things differently and risk failing!

Insurers need to commit to a long-term digital strategy and view digital transformation as an opportunity to create great customer experiences. Matt said that Innovation fails a lot of the time and digital maturity of insurers’ organization is the need of the hour. To evolve as a digitally mature organization, insurers’ leadership and management need to work towards fostering a culture that supports innovation, create a culture which is less risk averse, and build a system that is more tolerant of failures.

To summarize, insurers’ CEOs, CIOs must take into account the long-term business goals before investing in technology as a solution for digital transformation. Insurers need a technology platform that would enable them to reuse their core systems and the ability to seamlessly integrate new technologies coming in the future. Collaborating with technology partners who understand digital from an end-to-end perspective is key to this.

Watch Matthew Josefowicz, President/CEO Novarica share his thoughts on what does innovation mean in insurance technology today, by playing the below video:

 

WATCH THE FULL VIDEO OF THIS SESSION


If you are inspired by the takeaways of the post and want to learn more, click below to watch the complete recording of the session.

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