By FINTECH Books Contributor, Dimitri Anagnostopoulos
It took the financial industry more than 10 years and not until the GFC (2008) to shift attention from ‘risk-modelling’ to the importance of ‘risk-culture’.
We are experiencing a similar situation whereby insurance companies are
focusing on InsurTECH-adoption while neglecting the enabler, InsurTECH-culture.Typically, technology discussions focus on how InsurTECH can assist insurers to become ‘innovative’.
However, innovation does’t come by simply acquiring ideas, but by creating a company culture that nurtures innovation. It is often argued that innovative thinking should come from within, while reality shows that tech innovation mostly comes from outside (start-ups). But, does it really matter?
Having a look at the InsurTECH maps, it is apparent that the industry is not lacking ideas – actually has more than the market can probably absorb. So as an insurer you can probably not out-innovate the market. But even if you ‘acquire’ ideas, you are far from addressing the key challenges inhibiting implementation.
We keep seeing really exciting ideas, yet when we discuss implementation, integration and tangible benefits, companies struggle to demonstrate results. Such challenges point to ‘organisational-culture’.
Very few insurers change the way their technology investment portfolios are handled (ideas’ prioritisation, selection criteria, business cases’ generation and review, execution, integration). Each of the above steps (and sub-steps) put their own stumbling-blocks on the path to change. I intentionally use ‘change’ (not innovation), simply because not all ideas are innovative (let’s not confuse novelty with innovation).
Some simply introduce cheaper and/or more efficient ways of doing things. Nothing wrong with that, yet they still need to pass the hurdles and may require a large amount of change in the organisation.However,there is only so much change you can practically achieve in the short-term. Too many changes may feel like trying to fix a plane’s engine, while on flight. So don’t just think of innovation.
Think Change and what it takes to adopt technology and make it work. Think of ‘InsurTECH-culture’ to facilitate ‘InsurTECH adoption’.