INNOVATION IN THE INSURANCE INDUSTRY
RC: Some would say that the insurance industry is not known for its innovative thinking. Do you agree? And what are the consequences for the industry if it stops (or doesn’t become) innovative?
Sagalow: In reality, we have no choice but to be innovative. Our fundamental obligation is to understand, even anticipate, the needs of our customers and effectively respond to those needs. Customers have available to them increasing numbers of choices regarding how to manage risk in their organisations; buying insurance from traditional insurance companies is only one such option. In a recent survey released by Accenture, 67 percent of respondents said they were prepared to purchase insurance or insurance substitutes from non-insurance companies, including Google and Amazon, if the traditional insurance industry continues not to meet their needs. Mike McGavick, CEO of XL group, said it best when he asserted that “If we, the insurance industry, do not innovate we will become irrelevant.” The insurance industry cannot continue to be known as a ‘smart follower’. Instead, we must be creative leaders. If the industry is to succeed, innovation must become ‘the new normal’.
Kelley: Insurance companies and risk management entities are continually challenged with the test of developing innovative solutions to earn market share. Innovative solutions that respond to client coverage needs are absolutely essential for insurance players to remain competitive in today’s business environment, entrenched in a prolonged post-financial crisis mindset.
Apr-Jun 2014 Issue
Innovation Insurance Group
Navigators Management Company, Inc.