The Innovation road diverged in an InsurTech wood,
And while I wanted to travel both
And be one searcher, long I stood
And looked down one as far as I could
To where it was lost in unknown techo growth;
Then took the other, as just as fair,
And an improving process that settled the claim,
Because it was known and pathways were clear;
Though as for the passing share
Had improvements that were about the same,
And both in the searching equally lay
In process few adjusters had gotten on track.
Oh, I kept the first as a new way to pay!
Yet knowing how AI leads one to the gray,
I wondered which path was the proper tack.
I shall be telling this with a sigh
Some financials reporting period hence:
Two innovation roads seemed to diverge in a wood, and I-
Knew innovation was not just AI
And that will make all the difference.[i]
Patrick Kelahan is a CX, engineering & insurance professional, working with Insurers, Attorneys & Owners. He also serves the insurance and Fintech world as the ‘Insurance Elephant’.
A favorite poem (sorry, Robert Frost) co-opted for the message- insurance innovation is not only technological improvement, nor is it just process changes- it’s most often a careful combination of the two concepts applied to a problem or opportunity.
By the very nature of the putative designation of insurance innovation, InsurTech, the expectations are that industry improvements are essentially technological improvements. And for a great part, that is correct- except where it’s not.
Need to broaden access and improve admin prompts systemic process change and use of digital tools
Consider changes that are impending within the US flood insurance market – private insurance programs that lay outside of the National Flood Insurance Program (NFIP) and the program’s subsidized underwriting and premiums. Improvements in policies, process, and admin are inevitable. Process improvements that would be difficult to accomplish without concurrent technological advances in flood risk analysis. Prior reliance on flood maps that were in great part analog tools for risk identification have been supplanted by the digital innovation work of tech firms Hazard Hub, FloodMapp, and Previsico, among others. Property claim technical company, Verisk, has updated its ISO standard forms in anticipation of the growth of a robust private flood market (and is encompassing its proprietary digital flood risk tool, WaterLine in the process.) Digital innovations for risk assessment, more analog efforts for establishing a new flood policy form. Promising opening of flood risk options to millions of property owners, leveraging digital innovation for analog service. A caveat for all- innovation must be focused from the customers backwards to the improvement efforts.
Ease of customer access supports unique tech and org orchestration
One Insurance is taking deliberate steps to providing comprehensive, multi-line coverage for its German customers (homeowners and travel cover available at this time) that is not accompanied by multiple policies and carriers. Not having the need to deal with multiple layers of carrier contacts, invoices and contact points is truly a welcome process improvement but would be impossible without the company’s technical innovation related to determining risk factors of what One Insurance CEO Oliver Lang refers to as ‘microservices’. The company will expand insurance line availability over the next year, and the microservices approach will scale to meet the customers’ needs. Magic innovation? Sure, a little, but the company’s leadership has in place MGAs that orchestrate smooth administration of the company’s multiple cover offerings, keeping the varied customer offerings ‘process invisible’ to its clients and their ‘one’ policy. A telling endorsement of the firm’s innovative approach- expansion into a neighboring country to the German market will require fewer than ten additional employees. (thanks, Frank Genheimer, for facilitating the One Insurance discussion).
There are parallel policy aggregation options available through innovators that have designed processes that place disparate insurance policies into one accessible option, e.g., GloveBox in the US. Not one policy, but one place to find all things insurance. Clever process innovation that has a strong flavor of tech.
Process change prompts tech improvement applications, with government encouragement
Insurance cover in a person’s foreign posting has typically posed administrative barriers, take for example that of those multiple nationalities that often are posted within the United Arab Emirates. An insurance innovation company, Insureatoasis.com, in its developed business of providing an insurance e-commerce platform within the UAE, is working on APIs that would dovetail with UAE platform options in coordination with respective expats’ home insurance carriers. (further discussion- see the commentary by Dr. Robin Kiera of Digital Scouting ) Is it recognition of process needs that would benefit from support through developed tech? Sure seems to be. It’s promising enough innovation that the federal Ministry of Finance’s Mohammed Bin Rashid Innovation Fund (MBRIF) has accepted the firm’s tech/process approach into its Summer 2020 MBRIF Accelerator program. Sridhar Subbaraman, company founder and owner, has the long-term goal of applying the innovation effort blend into an initiative that mirrors innovation hubs elsewhere in the insurance world.
Process and tech innovation, two divergent paths for companies to take, or no regrets because the paths are taken together? Robert Frost was not InsurTech- innovation is both.
[i] Robert Frost, “The Road Not Taken”