Last week I had a chance to moderate a round table on Entrepreneurship and Innovation at the 2017 SOA Annual Meeting. It was a great session with a lot of alternative view points on the future of insurance.
Topics of discussion ranged from the displacement of production and distribution to Amazon and Walmart, to regulatory understanding across different jurisdictions and why this complexity is a necessary reality, and more philosophical arguments around insurance’s role in society and whether we are optimizing these duties for the “jobs that need to be done”.
I was joined by industry thought leaders from different parts of the insurance ecosystem and around the globe. Many of them come from an actuarial background and are well versed in leading innovative strategies within their own firms.
The importance of diverse perspectives
The session was a great reminder that as we continue to challenge conventional wisdom, it is equally important to understand and recognize the different perspectives we all bring to work each day. This lens of diversity can greatly improve our ability to really make progress.
Our friends over at Cookhouse Lab put this 'lens of diversity' in to action every day. They offer a collaborative space for innovative thinkers of different backgrounds to come together and develop solutions. If you look at the ideas and projects that have come from Cookhouse Lab so far, you quickly realize the power of diverse perspectives coming together to co-create and collaborate.
How did we put this 'lens of diversity' in action at the 2017 SOA Annual Meeting?
During the Entrepreneurship and Innovation session, we were tasked with answering the following question:
Given unlimited resources, capital, and the removal of hurdles, what is the largest industry challenge you would like to address?
Before sharing my thoughts, I’ve distilled answers shared from fellow thought leaders below*:
Marcela Abraham, Actuary, Willis Towers Watson , Mexico City, Mexico
Innovation ideas are nice, but execution is the key. In today’s world, technology innovation can be replicated quickly and easily, so a focus on operations and execution is necessary to create positive change for our industry.
Don Takebayashi, Assistant Vice President, Pacific Guardian Life, Honolulu, Hawaii
Focus on capturing the millennials, the largest population on earth. In addition, how do we as an industry leverage the geographic population growth expected from developing regions as incomes increase and the need for risk protection expands.
Duncan Briggs, Global Director, Insurance Consulting and Technology, Atlanta, GA
What about distribution? Does insurance have a future or will it be overtaken by those players that dominate the last mile to the customer – Amazon, Walmart, and other retailers that have all the data to establish new variables for pricing risk?
Pascal Mignery, Actuary and Chief Executive Officer, Addactis, Brussels, Belgium
In Europe, the regulatory environment under Solvency II is well understood, but for an enterprise like ours that focuses on risk and insurance solutions, a better understanding of the US market is required. What’s the same? What’s different? What are regulators willing to accept or not? But in the end the real question is “How can we be innovative and game changing in a fiercely regulated-driven market”?
And finally, I shared my thoughts on the biggest challenge I’d like to address if given unlimited resources:
I think the biggest challenges relate to data quality and business process. The problems with inefficiency and lack of data, stems from business practices that were put in place decades ago and never changed. In the absence of technology we did our best to institute practices that included the use of door-to-door agents, medical and invasive underwriting, and paper-based treaties requiring wet signatures.
What can we learn from today's leading innovators?
Contrast this with today, where we are surrounded by industries and companies that are benefiting from all kinds of innovation. Including companies like Amazon that have pioneered buyer preferences and the next logical conversation or insurance startups like Jauntin' that leverage mobile GPS and geo-fencing to recognize coverage needs based on location. Their business processes are quite different, streamlined and focused on the customer, rather than saddled with arbitrary benchmarks from investments made decades earlier.
Embracing a Cloud First, Mobile First mindset
We have to embrace a mindset of Cloud First, Mobile First across the entire insurance value chain. If we can accept this as the new reality, the reality in which we all operate, then innovations in Machine Learning, IOT, and Big Data can come together and drive some real positive change. The origins of life insurance stemmed from the concept of “benevolent societies”, groups that cared for and covered funeral expenses for members. So positive change in insurance isn’t new or novel. We just need to remember how innovative it once was.
Welcoming the opportunity to learn from other perspectives
As you can see, from this one question, we had the chance to learn about very different perspectives from professionals in the same industry. And each perspective provided the opportunity to think about innovation in a way we may not have considered before. Now, imagine what we can accomplish if every day we welcomed the opportunity to learn from someone else’s perspective.
Looking for opportunities to co-create, collaborate and innovate with industry peers? Check out upcoming projects at Cookhouse Lab.
*The opinions shared have been distilled from the Innovation and Entrepreneurship session at SOA Annual meeting by Mitch Ocampo