Insurance innovation of the month – AXA XL’s Cube – the world’s first risk management incubator
Ninety’s “Insurance Innovations of the Month” feature contains regular snapshots of real and recent insurance innovations, based on conversations with the innovators behind them. They are drawn from anywhere in the world, and from all categories of insurance. If you’ve got an innovation you’d like to highlight, drop us a line at firstname.lastname@example.org.
Insurer(s): AXA XL
Insurance type(s): Specialty
AXA XL was looking for a new proposition to launch that would create a high impact for their client management services and position them as the most innovative company to work with for its clients. They were looking for a service that would allow them to create more partnership-based relationships with their clients, rather than the one of payer and insured only. As AXA XL had had previous successes launching big ideas such as Insurwave to market with their clients, they started to look for a repeatable process to be able to approach different clients, different industries and different risk challenges. Client relationships are crucial and are often being protected to avoid an overload of initiatives, which meant that finding a specific way to engage the clients was very important. This is why Digital and Distribution teams at AXA XL have come together to work on Cube.
Cube was able to come to life because AXA XL brought together a very diverse group of people from different functions to work on this challenge. They started by testing their hypothesis that the best risk solutions would be developed by working in partnership with clients.
They were looking at the issue from many different directions including exploring things like frictional losses, risk management and other aspects of risk, not just risk transfer products. At that stage they received very positive feedback from their clients and made some changes to the proposition based on client conversations. This resulted in what was launched to the market as Cube.
Cube is trying to create a real change for its clients, and to go through change sometimes one has to feel uncomfortable. But by creating Cube, AXA XL is hoping to create the comfort of a partnership to tackle “uncomfortable” change together.
The outcome of the work is that AXA XL has put into the market the world’s first risk management incubator – with a stunted process and fixed timeline. It’s quite unique for the insurance industry to do something in that timeframe. What is more, the co-creation approach has proven to be a great way for AXA XL to drive better interaction and engagement with their clients and to work in real partnership together. The commitment is about the seriousness that everyone involved is taking to solve risks.
Similar to other initiatives, both in the insurance industry and wider, Cube was impacted by the COVID-19 pandemic. For Cube it meant two things: one, it made us virtualize the whole process, and two, the virus and pandemic are creating a new set of risks that are a top priority for clients to address. The good news is that AXA XL has the right way to do it.
As a social, for-purpose business ourselves, Ninety is always looking for the social, human or environmental impact of new ideas in insurance. Here, the impact is clear: corporates who are better equipped to manage their risks are safer and able to deliver stable, long-term value to the end customers.
Tips to other innovators:
- Be aware of the feeling of friction between clients and insurance organization, where clients can be wary of sharing real-time data, for fear of their premiums becoming higher. The reality is that if the risk is managed well, the client’s exposure is lower and the premium will follow.
- All insurers are used to selling insurance, and starting a new form of service can be challenging as it often needs a different approach and might have different timelines, require a different process and a different mindset.
Categorization for insurance innovation portfolio planning:
Ninety Ten Big Ideas: this is an example of Ninety’s “Risk Prevention” and “Innovation Explorers” Big Ideas.
Ninety Ten Types of Insurance Innovation: this innovation combines the following Ten Types categories – 1) Product & Proposition, 2) People& Structure.
In the Ninety Rollercoaster Insurance Innovation Model, Cube is part of the last level of maturity that we call “Collaboration”