Get the Report! The Modernization Imperative for Insurance – in partnership with Datos Insights

By · March 03, 2022
7 minute read

Insurtech alone won’t make you an innovative insurer

Redhaired woman sitting at desk looking at code and logs on 2 monitors

Several times a week, I speak to insurance organizations around the world. They all talk about a desire to be innovative, agile, and to promote transformation.

They all refer wearily to similar war stories about big policy admin software replacement projects that have cost millions (or, commonly, tens of millions), and rarely offer a return on investment.

Going live two years later is a missed opportunity. Their universe has changed, and requirements need updating. The new world demands a quick return on value and a different way of doing things.

While insurers talk a good game, many are stuck in legacy ways of thinking – a rigid Waterfall approach to delivery, probably based on a history of lengthy, unwieldy software projects. They want a rapid return on investment, but often lack the culture to support it themselves.

At the same time, many vendors also assume that a successful project is one that just goes live, which seems a pretty unambitious benchmark to me. A successful delivery is surely about meeting the insurer’s specific business needs or ROI objectives, and not just getting them over the line?

The successful modern insurance organization needs to be underpinned by a strategy of experimentation, collaboration, and ideation. External factors and new competitors are moving so quickly, being able to prototype new propositions rapidly and cheaply is absolutely paramount.

The importance of failure

Technology can, of course, support this approach, but a forward-thinking insurer needs to promote a safe space for failure, where setbacks are less about negative connotations and more about learning for the future.

If you’re going to fail with a new proposition, you need to be able to fail fast and affordably, and also be able to use the outputs to inform the future, so you’re constantly improving as a business.

It’s interesting to note that, according to McKinsey, 96% of businesses think they prioritize innovation as a strategy. Conversely, only 6% are satisfied with their innovation performance. It’s clear that organizations need to embed a culture that accepts risks, tolerates failure, and supports new ways of working.

One American insurer, CSAA Insurance Group (CSAA IG) embarked on a deliberate, systemic approach to create a pervasive culture of innovation within their whole company.

CSAA Insurance Group’s innovation success

Early on, CSAA IG’s executive team recognized that, to create a culture of innovation, the organization needed to do more than embrace individual innovation projects. To ensure a truly transformative culture-change effort, the team outlined a new corporate-wide organizational strategy to sit alongside its other market-focused plans to “foster a culture of insight and innovation”.

They also made it part of their talent management approach. Innovation was added to the company’s values statement, and included as a core competency to consider in assessing, rewarding, and developing employees.

CSAA IG now deliver innovation training to all employees. Its program provides tools and applied exercises based on design thinking, and makes it clear that everyone can – and should – contribute creative ideas for improvement in business processes, customer experiences, and product offerings.

Employees participate in a half-day program that tackles real business problems facing their workgroups, and results in a prioritized list of ideas.

This all-hands-on-deck approach to innovation training has not only provided a greater sense of ownership and engagement among CSAA IG’s workforce, it’s produced tangible results.

For example, a team of insurance underwriters analyzed call data and led improvements to voice prompts that reduced misrouted phone interactions to their department by 40%.

Other teams have helped streamline the process for issuing proof-of-insurance cards, and are contributing to prototyping efforts for smart claims systems, allowing customers to submit images of damaged property for online assessment.

Embedding innovation into your culture

Employees also have access to CSAA IG’s Innovation Hub, an online portal, that includes a self-service range of resources, including a design-thinking toolkit, a calendar of innovation-related events, self-paced training materials, articles from innovation experts, and more.

The company even set up an idea-management platform, where various departments can post their innovation challenges, and where the crowd can contribute, evaluate, and develop solutions.

To help generate excitement for the platform, during the first online innovation challenge event, anyone who submitted an idea was surprised with a paper light bulb posted in their cubicle workspace. With light bulbs popping up all around the office, employee motivation to participate sky-rocketed, and the company’s first online challenge received an 80% participation rate.

The role of technology in innovation

Creating a culture of innovation is about much more than external soundbites or creating a new department. Culture change takes time and significant effort, and shifting culture toward innovation is no different. The process may start at the top, but it’s fundamentally about getting all employees involved.

It’s also a continuous process. I still see insurers talking about their digital transformation project as if it’s a one-off exercise with an end point. Surely organizations now need to embrace innovation as a permanent part of their DNA?

That said, technology should still be there as an enabler to innovation. The best tech providers need to provide tools that empower digital makers within an insurer to prototype and mock-up their own digital journeys.

Insurers should ask their technology partners:

  • can they configure and test flows in days (or minutes), rather than weeks?
  • can they deliver a platform that allows the innovators within the business to start with the data and then build the journey, or vice-versa, by beginning with mapping out pages and flows and then adding the risk data?
  • can they split flows and test the results between A and B?
  • Can they make changes “on the fly” and test the results real-time?

Where FintechOS can help

At FintechOS, we’ve developed a low-code/no-code Innovation Studio that supports data management, business journey design, rating and scoring, digital documentation, and business workflows.

“Low-code/no-code” has become an over-used buzz phrase that seems to be the default these days, but at FintechOS, this is a genuine ethos of what we do – even I can use our platform!

However, once again, even at FintechOS – a technology provider – the tech is only one part of the enabler. Our Academy delivers a comprehensive suite of online and easily accessible training courses. These are aimed at getting you certified as quickly and simply as possible so you can row your own boat, but with videos, documents, and easy-to-access human beings available to support you at the touch of a button, as and when you need.

We also recognize that we can’t do everything, and for that reason, we’ve developed our own Marketplace of Accelerators and Connectors:

Accelerators allow you to get up and running quickly. If you want to test whether pet insurance is a competitive option for you, simply download our accelerator and give it a go.

Connectors are a wide-ranging suite of pre-built integrations. Again, if you’re wondering whether a reference to a credit score or an external fraud check may deliver operational efficiency and a customer service improvement, you’re able to download the package, reference it in your quotation process and monitor whether it works for you. If it doesn’t, simply switch it off.

Our high-productivity financial infrastructure was designed as a tool to empower your employees to innovate on your financial services products. No more, no less.

We can give you a starting point, but embedding a culture of innovation in your organization is up to you.

To find out more about the FintechOS platform, book a demo.


Paul Webster is a Presales Consultant for Insurance (UK) at FintechOS.

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