April is one of the best months for learning about early-stage companies and technological platforms influencing insurance. Why April? Because this month the Global Insurance Symposium is held in Des Moines, Iowa. What we find makes GIS so special is that both attendees and speakers take off the gloves, show a willingness to look beyond the status quo and discuss the state of the future.
Guy Fraker, our Chief Innovation Officer, will be speaking on a panel exploring "wearables technologies" at the GIS and we want to use that subject to highlight the importance of incumbent insurance organizations taking a broader view when selecting market intelligence platforms. Such platforms can help a company to assess the vast array of innovation opportunities that continue to emerge.
Insurers have a choice when it comes to innovation-related research and intelligence, which generally is:
- 100 yards wide and ankle deep.
- A mile wide and one inch deep.
- A mile wide and a mile deep.
Which of these options is most likely to yield insights that lead to the exponential break-through opportunity?
Let’s say for the sake of argument that the broadest actionable insights are going to come from Option C. A corresponding assumption, though, might be that this choice represents too much information and would require one or more analysts and months of work to manage the information and yield those insights.
Today, however, such an assumption would be inaccurate given that a qualified and tested A.I. platform can accelerate the analysis. Option C therefore does not require any more effort or resources to take advantage of its depth than Options A and B.
Another consideration is whether a user is served by a market intelligence platform that stays within the boundaries of conventional wisdom, restating the same information one can find through countless sources, or better served by one that pushes deeper.
In the options listed above, the phrase “a mile wide” refers to the practice of taking a wider horizontal view of innovation. In contrast, Option A, "100 yards wide," reflects an analysis that is slightly more focused and makes some additional effort to discover insights.
Innovation does require questioning the status quo, including the very definitions of labels like "wearables technology." Now, let’s move beyond theory and conjecture, in favor of actual data points.
In July 2017, CB Insights, an often-cited source of innovation research, published an analysis of wearable technologies that listed 149 funding deals from 2016 totaling $1.8 billion. In its analysis, the article highlights how funding took a dramatic decline in 2017 to $628 million.
Another market information source, Coverager, includes 14 "enablers" in the category of wearables. The table of wearables tech lacks any explanation or context beyond early stage company identification.
What is missing from both platforms? Neither firm seems to challenge the most basic question: What is a wearable? Is a wearable device one that measures fitness activity and may even monitor vital signs? That would certainly fit a conventional definition.
Insurance Thought Leadership’s Innovator’s Edge platform takes a broader view. According to Innovator’s Edge, the conventional definition of wearable technology includes 358 early-stage firms that received $2.7 billion in funding in 2017. However, these companies are just the tip of the iceberg.
Innovator’s Edge also tracks 528 wearable medical device innovators from 62 countries that received $16.7 billion in funding last year. Consider, for example, Retina Implant out of Germany that has created an electronic retinal implant to gradually restore sight to specific cases of blindness. Is this not a wearable?
We can also look at nano-medicine companies such as Liquidia Technologies from North Carolina. Liquidia is developing particle based vaccines that can attack a variety of viruses residing in the body. Is this not a wearable?
More importantly, in terms of identifying early stage firms with the potential for driving down chronic health care claims, might this be a wearable firm worth knowing about? Possibly, but it would not likely be found in these other platforms.
Early-stage firms in the wearable market also come in the form of medical device startups—many of them targeting improved health care diagnostics and treatment protocols—which received $9.3 billion in funding by year end 2017. This category also includes firms such as BoneSupport, which has created an injectable material to help fractures heal faster, serve patients with chronic bone fragility, along with many other applications. Located in Switzerland, it is in the final stages of an IPO, having been backed by a total funding exceeding $100 million.
The chart below is an example of Option C: A mile wide and a mile deep. By the way, just the 3 companies mentioned above received $220.3 million in funding last year.
In conclusion, the technological capabilities being brought forth by billions of dollars and many of the brightest minds don’t neatly fit as a square peg in a square hole categorization.
Relying on a superficial analysis of innovation—which intuitively sounds agreeable because the information is neither provocative, nor wakes one up in the middle of the night—is very tempting and easily digestible, but please don’t allow yourself to fall into that trap. Picking an intelligence source that doesn’t take a wider view limits your options without your permission.
Those insurance industry executives who understand innovation growth can be measured in multiples and not percentages also display a willingness to venture beyond their comfort zones to discover real innovation opportunity. This will be one of many topics discussed at the GIS conference on April 25-26, and we hope to see you there.
Guy Fraker
Chief Innovation Officer
Paul Winston
Chief Commercial Officer
P.S. In addition to in-person events, we are pleased to be participating in several upcoming webinars each of which is aimed at helping insurance organizations improve their understanding of the opportunities from innovation:
May 3: “Insurtech and Insurance in the Age of Innovation” Presented in partnership with Johnson Lambert, this webinar will focus on how and where to start an innovation program, defining what innovation means and who should be part of the team within an organization to have the best chance of success.
May 9: “A Systematic Approach to Successful Innovation” This webinar from the Insurance Information Institute and Innovator’s Edge will introduce attendees to a systematic process for insurance innovation that has been successful at driving meaningful ROI at some of the world’s largest insurers and reinsurers. This webinar is the first of a two-part program that will be followed by a live interactive workshop in Chicago to help attendees focus their efforts and identify key opportunities. Register to attend both.
May 16: “Insurance Innovation Mythbusting” This webinar, part of the National Association of Mutual Insurance Companies’ Insurtech and Innovation Webinar Series, will address the myths and realities of innovation, especially for insurance companies that question whether it is possible for a smaller organization to succeed at this and are uncertain how to begin.
We encourage you to consider attending these events to further your understanding of what innovation means for insurance organizations and to more confidently drive innovation results. You can also track our upcoming webinars here: http://info.innovatorsedge.io/webinars
