Let’s set the scene. You’ve got an “innovative” idea. You aren’t sure exactly what the end product will look like, and it’ll probably be expensive to develop. But you think it could be a game-changer for your organization and revolutionize the insurance industry. The challenge is, how do you take an “innovative” idea to execution? Where do you start?
RGAX partners with carriers, distributors, insurtechs, and Big Tech to solve the most pressing challenges in life insurance and to advance transformational capabilities. Through our collaborations, we’ve gained numerous insights into how to successfully manage insurance innovation initiatives. Mitch Ocampo, RGAX Americas’ Managing Director and Head of Innovation, and Chase Huey, Innovation Studio’s Executive Director, recently shared some of the lessons learned at the Bermuda International Long Term Insurers and Reinsurers (BILTIR) and InsureTech Connect conferences.
I’ve distilled their comments into nine tangible tips any insurer (or company), large or small, can take to navigate the innovation path from idea to launch:
#1 Separate the useful from the interesting.
Not all ideas are worth pursuing. Sometimes the most transformative ones can look downright boring on paper. On the other hand, that cool new idea everyone fell in love with may solve a problem that doesn’t really exist.
One relevant example comes to mind. For those of you not too familiar with jumbo treaty violations, jumbo limits cap the amount of life insurance coverage any one individual can obtain. A violation occurs when a policy is issued that pushes the amount over that limit.
While this challenge may not seem exciting to some, it’s a huge challenge for underwriters, as they must assess the total in force coverage AND any other coverage applied for when approving a jumbo policy. It’s cumbersome, and if something is missed, it can cost the insurance company millions. In a 2017 study, MIB found that roughly 40% of jumbo policies were at risk. That equates to almost $72B in risk across the industry.
Knowing the importance of this challenge to the life insurance industry, TAI and MIB partnered to solve it. Learn more about their efforts in this recent article: An Answer to One of the Life Insurance Industry’s Most Costly Concerns.
#2 Look for input and ideas everywhere.
Your “innovation team” doesn’t have to come up with every idea. In fact, the best way to uncover transformative ideas is often by talking to people who deal with life insurance challenges every day, inside the company and out. Leveraging the talent across your organization while having a core innovation team plugged into the innovation ecosystem provides tools and methods to drive an idea to a solution and establishes key partnerships along the way.
#3 Leverage expert facilitators.
As you embark on your innovation journey, you will find that sometimes the most difficult task on hand is gaining alignment across leadership or functional areas. Employing (or contracting) expert facilitators trained to challenge the status quo and ask tough questions is the most effective way to get everyone on board.
One of my favorite examples is this one in which we helped a carrier align their leadership to an omnichannel vision. With so many ways to transact, there was little doubt that an effective omnichannel strategy was vital. However, as with many other new ideas, everyone had their own ideas on what that should look like. Jumping into a project without leadership alignment would have been a recipe for disaster. By using our approach called Life Design Sprints, RGAX could help them align their vision and create an actionable plan in less than a week.
#4 Break projects into stages.
Every innovation initiative can be broken into stages, each with specific KPIs. This makes your innovation initiative more manageable, helps you focus the right resources at the right time, and keeps everyone moving forward.
The four stages of innovation we deploy at RGAX are Concept, Validation, Prototype, and Scale-Up. View the on-demand webinar Drive Innovation Through Structured Methodology to learn more.
#5 Define success at each stage.
In addition to establishing KPIs at each stage, you also need to know what success looks like. For example, “mission accomplished” will look different when fleshing out concepts than it does during prototyping or scale-up. Each stage preceding scale-up might meet the success criteria; however, you may find out that the solution is not financially sound. Defining success at each stage will help you avoid the mistake of keeping projects alive when it becomes clear the idea isn’t viable.
#6 Validate before building.
No matter how well you think you understand the challenge and the value of your innovation, always validate it before building it. This means putting your concept in front of real-life users to gather direct feedback. The result will be a validated concept or an invalidated concept you can improve on. I’ve seen solutions fail too many times because the critical and simple step of validating with the customer or end user was missed. Do not take the path of “build it and they will come.” Your budget will thank you later.
#7 Pivoting is allowed, but ...
Whenever an innovation fails, no matter the stage, lessons can always be learned. A tweak or two may be all you need to get back on the path to success, but now is not the time to cut corners. Innovation rarely takes a linear path, and as such, you will most definitely need to revisit previous stages to build out your concept, validate it, and so forth.
#8 Innovation is not execution.
Not many have the aptitude for both, and you shouldn’t expect them to. Once you hit the scale-up stage, you’ll want to reevaluate your team and likely assemble a new one to ensure you have executive leadership support and the required capabilities to execute and see the project through to completion.
#9 Accelerate Insurance Innovation with Sprints.
Sprints are a concept familiar to many product developers. RGAX has adapted the concept of sprints to the life and health insurance industry innovation with an approach we call Life Design Sprints. These fast-paced sessions offer an efficient, effective way to develop and validate innovative ideas using the design thinking methodology and are specifically tailored for the life insurance industry. Our team recently facilitated a Life Design Sprint for a global insurer to help find the right product market fit. Check out the results from it here.
Bonus Tip: Do What You Do Best. Partner for the Rest.
Insurance industry innovation requires a diverse set of talents and knowledge, such as industry knowledge, operational experience, project management skills, leadership, deep technological expertise, vision, and so on. Really, the list could go on, but the point is, it’s rare to find all these skills and experience levels in one organization. That’s why partnering is vital.
RGA and RGAX have a track record of bringing innovative offerings to market, often in partnership with third parties. These offerings help us and our insurance clients enhance the value of insurance products for consumers.
Sourcing partners, where to begin?
Now, sourcing and vetting partners is not an easy feat, especially when you’re inundated with day-to-day priorities. With global insurtech funding reaching $7.4B in the first half of 2021 (surpassing the $7.1B raised for all of 2020 by more than $300M), there are no signs of slowing down in this space, and it can often be overwhelming to even know where to begin.
RGAX has built relationships with countless partners within the insurance ecosystem, involving, for instance, disability claims fraud detection, chronic pain management, and early cancer detection. Think of our role as part matchmaker, part innovation Sherpa. We can introduce you to the people who can help you bring your ideas to fruition. We can guide you through the sometimes-rocky path of successfully bringing that game-changing idea to market. But ultimately, together, we can help people everywhere live longer, healthier, and more financially secured lives.
Got an insurance idea or a challenge you want to solve? Let’s talk.