The InsurTech Definition of Insanity

The definition of insanity is doing the same thing over and over and expecting different results, right? The reality behind, and perhaps even the origin of, this statement is the simple fact that change is hard. This is especially true in the antiquated, paper- and process-laden insurance industry, which has resisted any kind of fundamental upgrade for decades. In the meantime, other industries have raised the bar of consumer expectations to a level where it is now unreasonable for the insurance industry to not respond. In identifying what is needed to improve self-service opportunities, access, prices, personalized product variations and, in turn, the entire customer experience overall, insurers inadvertently shone a spotlight on the industry’s enormous technology gap. And, having made significant money in fintech, the investment community is driving considerable interest in insurtech. See also: The Formula for Getting Growth Results   Insurers are ramping up to take back control from the mentality of the “way it’s always been done” and “if it ain’t broke don’t fix it.” There are three things that insurers can do to change the insurtech definition of insanity, including evaluating and overhauling processes, establishing a transformation team and doing a little mythbusting. Reinventing the Wheel First things first. Take a good hard look at your processes, keeping in mind that, without a change in process, there will be no change in results. It’s time to reject, revamp and reinvent processes that were created as workarounds for things legacy systems can’t and won’t do. The insurance industry has accepted changes already in the last several years that no one could have predicted 10, 15 or 20 years ago. And, the on-demand economy is pushing further changes in product definition – what is billable and in what increments, who owns information, where it should be stored and who should have access. The processes that drove the insurance industry yesterday do not have a carte blanche license for tomorrow. Rubber, meet road. Empowered AND Accountable Second, choose the right transformation team. This may be made up of internal insurance domain subject matter experts (SMEs), of IT professionals with a working knowledge of the existing infrastructure and even of external insurtech vendor partners offering expertise with emerging technologies. But be aware that, as important as the makeup of the team is the mandate of the team; the transformation team must be both empowered and accountable for decisions and results. The right people will rise to this challenge instead of shying away from it. The insurance industry must collectively do a better job of creating an innovation environment where failure is a learning experience and not a cause for dismissal. Shiny Bubbles? Third, insurers must become futurists, fortune tellers and mythbusters. Sound unlikely? Admittedly, this is probably not going to happen, but in the absence of true foresight (or ownership of a Ouija board), insurers must avoid getting enamored of the next big thing or shiny object. In the past, technology vendors have been criticized heavily for throwing big advertising and marketing dollars behind vaporware, or going to market with half-finished products and using insurer customers as unsuspecting development partners. This trend is no less prevalent in the new insurtech revolution or among startups, as opposed to incumbent insurance technology vendors. Desire to take advantage of the latest technology trend or to jump on the insurtech bandwagon should not outweigh prioritization of technology initiatives with tangible business value, or due diligence to determine if a product is actually present behind the marketing and advertising curtain. See also: Matching Game for InsurTech, Insurers Resistance is Futile Maybe the industry is taking the first step in a recovery program. Insurance has recognized there is a problem to be solved, and, by and large, there is acceptance that “resistance is futile.” Few insurers will maintain that the status quo must stand, technology advances must not be incorporated, products must not be made more flexible and processes must not be changed. Technology can help the industry meet the demands of modern consumers, attract new talent, protect policyholder data, provide mobile access and on-demand products and relate better to Millennials but only if evaluated and implemented quickly and responsibly, and in conjunction with substantive process change. Those who don’t believe this to be true, and who are insistent on continuing to resist change, are likely to be victims of their own insanity.