Whether or not one believes the oft-stated “innovate or die” philosophy first attributed by many to Damon Darlin in a 1997 article: Innovate or die on the Net (1996) and often later attributed to Bill Gates, various research have found innovation to be the important value of successful companies of any industry. In fact, results show that half of the profit of most of the giant companies of world comes from products launched in last 10 years.
The below video shows 3 industry leaders talking about the importance of innovation in the insurance industry.
In the insurance industry (and perhaps most others), there are five general types of new product development efforts.
They are, in increasing difficulty, but equally in increasing profit potential:
- Simple updates to existing forms required by regulatory agencies or suggested by new filings by industry organizations such as ISO, using pre-approved templates,
- Proprietary rewrites, refreshes or “fixes” of existing products or services to bring them up to market (and, hopefully, slightly beyond) where no pre-approved template exists,
- “Transfers” of existing products or services from one location, geography or industry to another,
- New to the Company (but not new to the industry) products or services where the aim is to take an existing product or service in the marketplace and make it your own (hopefully with some unique twists), and finally
- New to the Industry products and services.
The first four of these new product development efforts are by far the most common and are often referred to as “Incremental Innovation”. The fifth, which often carries the greatest risk but also the greatest potential return, is often called “Disruptive Innovation” or “Transformative Innovation”.
In my 30 year career doing new product development and innovation strategies in the insurance industry I have done all of these types of work, almost always at the same company. All are needed to reach the proper “portfolio of innovation”.
Finally, while the above speaks of “products and services”, in reality innovation arises from any customer impacted change in value proposition. One of the companies I worked for called their new product department the “New Proposition” department for this very reason. They were right. In this way, “innovation” can be product, service or process focused. For example, a very successful type of innovation change can be organizational or structural changes in placement of personnel, underwriting authority levels, service commitments and hiring of “practice leaders”.
Innovation Insurance Group, LLC
Innovation Insurance Group offers product development services to carriers, brokers and entrepreneurs, from inception through launch. These services can apply to developing new products in existing or emerging risks (e.g., reputation, cyber, supply chain, intellectual property, climate change), or they can consist of product rewrites to meet the demands of a changing marketplace. We also work with companies to develop or improve their product development process.