Innovation Is a Necessary Step for Growth in the Insurance Industry

April 15, 2008

The economy is getting more complex and the marketplace continues to soften. As such, ceativity and innovation in the insurance industry is now necessary and key to long-term success, according to Julie K. Davis, executive vice president for Aon Corp.’s Wired for Growth program.

Davis was a featured speaker at the Women’s Network Group in Sacramento in March 2008. Her focus was on innovation in the insurance and professional services industry. The group of women shared ideas on ways to promote new innovation throughout the industry.

Davis presented ample evidence that new product and service innovation in the insurance and professional services industry can take flight. She has been tracking new product innovation in the insurance industry for the past year. New products and services have ranged from pet insurance and privacy liability protection, as well as programs designed for new industries (clean technology and nanotechnology), she indicated. Over the past 12 months, the market has seen a wide range of new insurance products and services, but innovation is still not at a level needed to meet growing customer needs and provide an economic lift in the insurance industry, she said.

Business leaders in the insurance industry can play an important role in new product introductions and moving the industry forward to help cushion any economic downturn. She suggested the following steps for the industry:

— Review all of the market segments you currently serve. Some may be growing faster than others and is poised to perform better in an
economic recession.

— Review all of the products you currently offer. While traditional
insurance products and services haven’t changed much over the years, specialty insurance products and markets have the biggest opportunity for innovative and creative review. There are now more than 100 classes of professional liability opportunities.

–Don’t overlook opportunities to sharpen and design your distribution

— Thought leadership is an increasingly important driver of the success for insurance agents, brokers, wholesalers and carriers. Thought leadership goes beyond the ability to create innovative products and services. It is also a skill set needed to engage with more informed clients and prospects.

— Depend on diversity of thought and innovation in your organization.
Establish an innovation group that has cross-industry experience and
ideas. Too many efforts on product innovation fail because the initiative did not involve enough diversity of thought in the industry.

— Listen to customers. Customer groups can guide your new product and service innovation efforts. They can have insights on the seemingly small things that can make a difference.

— You must change your marketing mix to include something other than the traditional means of advertising, sponsorships and prospect communications. If you don’t include consumer and industry insight, your efforts may be slower than your competitors.

The Women’s conference held in March 2008 included professionals from across the nation who shared ideas on how to promote innovation and thought leadership in the insurance industry. While the industry is making progress on innovation of new products and services, some national economies are outpacing the American economy on innovation, Davis said. The insurance industry is one of those industries being challenged. Leadership at insurance agents, brokers, wholesalers and carriers needs to include innovation as an urgent agenda item to position for positive economic growth, she concluded.

Davis has been with Aon for 15 years, most recently in the Wired for Growth program that serves insurance and risk management needs for emerging technology, Internet and life science firms.

Source: Women’s Network Group

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