3 Reasons Why an Innovation Program can Help Insurance Companies Beat Disruption

High angle view of a group of young successful businesspeople in a meeting analyzing and planning a new strategy (1)

Disruption in the insurance industry can be avoided with strategic innovation planning- here's why.                                                                  

Carroll Elger|
April 12, 2019

In our final entry in this series on disruption in insurance, we discuss how innovation programs actually work for insurers to beat disruption in the industry. If you haven’t read the previous entries in the series, 5 Technologies Disrupting the Insurance Industry and 3 Startups Disrupting the Insurance Industry, I suggest doing so, as they’ll provide useful context for when you read this article.

As we’ve discussed in those blogs, disruptive technology is here to stay in the insurance industry, and it’s impacting business models and causing sudden shifts in the market already. The companies that put themselves in a position to beat competitors to the punch, whether it be by directly embracing new technologies, adjusting customer interfaces, or partnering with an insurtech startup, will be the companies who survive disruption and potentially even benefit from it.

To be one of the companies that is prepared to take disruption on and thrive, it’s essential to have in place what’s commonly referred to as an “innovation program”. We define an innovation program as a set of activities coordinated into a comprehensive plan to both bring an influx of innovative ideas into the company immediately, and establish a repeatable process for innovation that will create a Culture of Innovation at the company long-term. This can be done in a few different ways, but for the purposes of discussing why a program helps with disruption, I’ll be using the approach that Ideawake uses, as I personally feel it is the most effective, efficient approach. Here are three reasons why an innovation program can help insurance companies beat disruption:

1. Innovation management software is a catalyst for effective ideation

An innovation program set up to succeed in a mid-size to large insurer will take advantage of the benefits of idea management software. In the flow of an innovation program we call the innovation pipeline, idea management software will be the first activity employees in the program encounter. Idea management software will allow you to collect ideas from employees that target problems with disruption, allow employees to collaborate on those ideas, and vote on them to organically bring support and interest behind the best ideas.

Idea management software not only has this process built-in, it also has a host of other features that catalyze the ideation and collaboration phases of an innovation program, be it multiple workflows, gamification, scorecarding, or integration with email promotion. As an example, gamification of the collection process is done with a user points system, a tiered rewards system, and an automatically updating leaderboard page. Gamification ensures employees are excited to use the platform and motivated by friendly competition. Features like this are what make idea management software an essential piece of an innovation program.  

2. Innovation programs benefit greatly from crowdsourcing

When companies decide to start innovating, often they just break off a handful of employees into a new “innovation team” and set them on their way. Crowdsourcing ideas, ideally done within an idea management software platform, expands the scope and ideation possibilities beyond just what a single team can do. Most obviously, crowdsourcing ideas from employees simply means that you’re receiving more ideas total- always a positive for innovation. If you’re using idea management software as previously recommended, this greater number of quantity of ideas won’t be difficult to handle.

Crowdsourcing also positively affects the quality of ideas. A front-line employee may have an idea that has stemmed from their day-to-day interactions, but it isn’t especially workable in its current form. When you’re crowdsourcing, employees from other departments can help contextualize an idea, and refine it to adhere better to the infrastructure of your business. The ideas that stem from crowdsourcing many different areas of a business can be surprisingly well-developed before they even reach leadership.

3. An accelerator component enables employees to validate, test, and pilot their own ideas

A planned innovation program that has set goals, strategy, implements idea management software and crowdsourcing will still only get less than halfway through the full innovation pipeline. We define the first two stages of the pipeline as “Plan & Promote” and “Crowdsourcing”, which we’re covered in our first two reasons. After that, you still have “Validate, Prototype, and Pilot” to bring an innovative idea fully from ideation to assessing market fit for a resulting product or service.

Ideawake has created what we call an accelerator-as-a-service, a proprietary service that can validate, prototype, and even pilot ideas collected through crowdsourcing and collaboration. These latter stages of the program provide curriculum, coaching, and resources that enable employees to be entrepreneurs within the business. These employees become the role models for innovation within your company, ensuring that not only will your current innovation program see results, your business is also poised to continue innovating into the future.

That last benefit, being poised to continue innovation into the future, is the culmination of why an innovation program helps beat disruption. An innovation program that incorporates all of these features will be repeatable, which is essential as disruption is constantly shifting and growing.

These reasons are why an expert innovation program is essential for an insurance company facing disruption. If you want to learn more about innovation programs, software, or an accelerator-as-a-service, you can book a demo with Ideawake here, or send an email to [email protected] to ask for more information.

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