Within every insurance company, there is a wealth of ideas about how to improve processes and deploy technology in creative ways to solve business problems. The challenge for most insurers is to create a pipeline for ideas and then find ways to turn the best into innovative developments that deliver business value.
Fostering enterprise innovation is the objective of the recently created Innovate ITG (Information Technology Group) program at MetLife. “Innovate ITG is designed to encourage employees, regardless of level, to make business practices better,” explains Lynn McGinty, ITG vice president, supporting MetLife Auto and Home. “Those ideas are vetted by a group within ITG, and the most important ones get moved to the top.”
State Farm also has put new processes in place to encourage innovation, including a funding initiative for research and development (R&D).
Although insurers strive to be innovative, they also must choose new technologies carefully to ensure that IT developments are delivering value to the business. “In a risk-averse industry like insurance, you have to balance innovation with a healthy dose of reality,” says Andy Scurto, president, ISCS.
“For instance, they don’t realize that insurance companies need to keep their old products forever, in a lot of cases,” he explains. “You can have claims on products 20 years old—nothing ever dies once you put it in place. Technology needs to support that need, and one way to do that is by making certain developers understand not just the products specific to insurance, but also the regulations that are required.”
At Pegasystems, more than one fourth of the staff is involved in R&D, and the company is experiencing a 30 percent annual growth rate. Pegasystems believes that innovation begins by making its systems “insanely open,” according to Gary Kirkham, principal of insurance industry solutions.
This perspective has led to the Innovation Group finding new applications for existing technologies and capabilities. “We can leverage our supply chain network to provide risk prevention services, particularly in geographies where there is a requirement to maintain your vehicle or risk incurring greater liability, offering a service that will help insurers differentiate beyond price,” King says.
At Vertafore, collaboration is both a process for and product of innovation. In 2011, Vertafore enhanced its WorkSmart platform with WorkSmart Engage, which allows agencies to collaborate with carriers, managing general agents (MGAs), and customers. The cloud-based application provides agencies secure workspaces to organize renewal, submission, and client documents and communications.
TCS strives to create what Krishnan calls “creative dissatisfaction” among its developers.