A scheme and classification system for innovation in insurance.
Ninety has been working on an exciting report: Insurance Idea Pulse 2020. In our research, we’ve examined more than 500 innovations happening within the insurance space in recent years and we will share with you what intensity insurance is innovating in different lines of business, areas of business, what are the big ideas we are seeing at the moment, and untapped opportunities.
To classify and categorise the different types of insurance innovation, we have chosen to create an insurance-specific variation of the “Ten Types of Innovation” model, as codified in the book by Larry Keely, Ryan Pikkel, Brian Quinn and Helen Walters. Their inspiration was the periodic table, which helped chemists make sense of how things work by providing a structure in which to think of the elements. Their model’s ten types represent the “elements” for innovation, based on their analysis of 2000 innovations.
We’ve adapted this model to fit the insurance industry and its specific needs. “Ten Types of Insurance Innovation” is a useful structure to help you and your organisation think about your innovation portfolio. In particular, because it points to a variety of innovation activities that are happening across many areas of insurance businesses, rather than just in product/proposition development.
Ten Types of Insurance Innovation
The ten types of insurance innovation consists of 3 main areas: Configuration, Offering and Experience, which span across the usual business activities. Starting from the left-hand side, ‘configuration’ innovations tend to be more visible internally and examine how the business runs. In the middle, ‘offering’ innovations are typically those which people associate insurance innovation with, as they consist of things such as developing new products. Lastly, the ‘experience’ innovations section is the area in which organisations interact with their customers.
Each of these 3 elements of this business value chain has several components.
- Profit & Capital models: innovating business model
- Collaboration & Partnerships: using partnerships to create new opportunities
- People & Structure: changing the ways in which the organization is structured or ways of working
- Operations & Claims: innovations in internal processes and ways in which claims are handled
- Risk selection & Pricing: changes in the way risk is underwritten
- Product & Proposition: new products in your organization’s offer
- Added value services: non-risk related propositions that your organization offers to customers
- Customer experience: innovations connected with changing the way customers experience your organization in a variety of touchpoints such as Q&B or FNOL
- Channel & Distribution: innovations in which you look at ways of distributing your products
- Brand & Marketing: innovating in how your brand is perceived or how you market your products.
We hope that thinking about potentially valuable innovation areas in this way is helpful, whether that’s in portfolio planning or during the assessment of new potential opportunities.
It’s also worth highlighting that some innovations will affect multiple areas of the business, for example, if you are working on a chatbot to help your customer submit a claim, you are not only innovating around your customer experience but also in operations.
To make it easy for you to map your innovation efforts, we’ve created a Ten Types of Insurance Innovation tool, which can help you visualize your organization’s position and saturation against different areas of innovation. Download the tool here!
Insurance Idea Pulse 2020 will allow you to see how your organization’s innovation efforts compare to the insurance industry and where the next opportunities lie.