There are lots of ideas out there. Some of them come to fruition but most do not. In business, success or failure of an idea often comes down to timing; sometimes other factors come into play.
In other words, “not every idea is a good one,” says Richard Kerr, chairman and CEO of the electronic insurance exchange MarketScout, CEO of Bermuda-based Monster Insurance Co., co-founder and chairman of MarketScout Wholesale, and founder of the Entrepreneurial Insurance Symposium and the Entrepreneurial Insurance Alliance.
Successful entrepreneurs “realize that maybe two out of 10 of their ideas should be taken to market, and the other eight are either too early, too late, or just simply not a good idea,” he says.
But where do successful entrepreneurs in the insurance world find inspiration for their ideas?
Some who have achieved success in this field look back to previous innovations for insight.
Ross Buchmueller, CEO and co-founder of PURE (Privilege Underwriters Reciprocal Exchange) — which specializes in insurance coverages for the high net worth market — says he and his partners find inspiration in breakthroughs of the past.
“We are inspired by the entrepreneurial thinking of people 80 or 150 years ago,” Buchmueller says. “When we look at the formation of some of the old-fashioned mutual companies that developed out of various underwriting crises or problems, whether it’s Factory Mutual or USAA or Amica, or other companies whose roots were developed from some problem that they solved, we get inspiration from those companies as much as from many of the more modern entrepreneurial companies. … We look back at the entrepreneurship of the 1920s as an inspiration.”
Like past innovators, when starting his now six-year-old company, Buchmueller recognized a need in the market for high net worth individuals that he had the experience and skill to fulfill.
“For good or for bad, the high net worth market’s the only thing I’ve done nearly 25 years in the business,” he says. “But it is a large market and relatively underserved compared to other markets of similar size. There were at that time only three or four companies that had any interest in specializing in that space. We saw a large profitable market that was relatively underserved.”
Buchmueller also recognized that a start-up company as opposed to an acquisition or merger presented an opportunity to begin with a clean slate. “To be able to put the best technology in from scratch without having to deal with legacy integrations and all the complications that most insurance companies deal with, to be able to install very sophisticated products where regulators would embrace it because we weren’t trying to disrupt an existing book of business,” says the PURE founder.
Dave Bresnahan, president of Lexington Insurance Co., acknowledges that some innovations, such employee practices liability coverages, were “major game changers.” But, he says, emerging risks also present new opportunities for creative problem solving within the industry.
“When I think about what lies ahead, I think maybe the biggest opportunity revolves around social media,” Bresnahan says. While it may not be as relevant to industry veterans, for younger people “this is the way they communicate and this is probably the way they are going to be doing business. This is probably the way they are going to expect content to be pushed to them.”
“We spend a lot of time thinking about social media and its impacts and how it will change the way we do our business down the road,” he adds.
Historic Lloyd’s of London also looks to the future and emerging risks.
Lloyd’s emerging risk team works with the Lloyd’s managing agents, the Syndicates, brokers, universities, the press, think tanks, and others to “basically spotlight the emerging risks out there, whether it’s nanotechnology, climate change,” says Hank Watkins, president of Lloyd’s America.
“Behavioral risk is a big part of what we’re looking at, because clearly that’s not really been looked at from an insurance perspective in a long time.”
While underwriters are looking ahead, he says, they have guidelines to follow, and make decisions based on experience. “But there’s also a certain behavior aspect of underwriting that is not really quantifiable, or hasn’t been to date.”
Alan Kaufman, chairman & CEO, Burns & Wilcox
Some acquisitions, you thought that there’s a great team, and there may have only been three or four people in the team that are turning out to be good players and the rest just don’t fit into the culture. Your evaluation just didn’t turn out right. Not every hire and not every individual… from an acquisition is going to work out. … you hope that a majority of the people work out. You hope that there is a profit that you are getting some value for the acquisition. Sometimes, it turns out, unfortunately, that our acquisitions have not materialized into a very profitable business.
Rob Byler, president of Program Business, QBE
Then you have to get down specifically with each of the individual people and talk to them about how they need to make the change and what their job function and role [is], whether it’s going to change, if it’s going to change, how it’s going to change, so that they can understand the reasons behind it, and then people are more willing to make that move and to implement different processes, procedures, business approaches.
To me, if you can understand and see the path, it’s much easier to go there.