SMA is observing a noticeable shift in mindset among insurerswhen it comes to the topic of innovation. So just what is reallychanging and why is it important?

The insurance industry has a long history of measured, pacedchange. For many insurers, taking a planned, conscientiousfast-follower approach to solution technology investment is stillviewed as a viable and preferable strategy. The tactic has been towatch what is working well for peers and then rapidly try toreplicate it. The idea is to let others pave the way and suffer thepitfalls.

But, an explosion of technology advances is changing not onlywhat is possible, but perhaps more importantly, what customersexpect. Insurers are paying attention and demonstrating bolderinitiatives—many expanding their view and learning from othersoutside the industry.

They are looking for ways to improve the customer experience,bring advanced levels of automation to underwriting and claims, andadd more intelligence to operations and planning across the valuechain. Many are assigning formal responsibility for findingtechnology nuggets and novel approaches that will help them drivecompetitive advantage.

We are seeing more than a few insurers that are actively takinga serious look beyond the traditional boundaries of the insuranceindustry. They are searching for ways to drive smarterorganizations with smoother operations—seeking ways todifferentiate and create competitive advantage. They are findinguseful examples outside of the industry and are putting them towork in their insurance organizations.

Insurers are learning from the banking industry, as they begin to take ATMprocessing to the next level with mobile check cashing by usingsmartphone cameras and imaging software that are similar to the ATMimaging capabilities that exist today.

Insurers are looking at delivering traditional services, such asstatus inquiry, and combining them with related informativeservices about topics like safety and home improvement. They arewatching the credit card industry, gaining insight on the impact ofthe proactive servicing they deliver with reminders about billingdue dates, links for bill paying, and electronic confirmation ofpayments. And, they are monitoring the trends among retailers,airlines, entertainment, and other industries that are pushing theenvelope in the app world with any-time, any-place, real-timeaccess to information and service.

Leading insurers are making a conscious effort to invest ininnovation. They are appointing official groups with theresponsibility for taking a strategic technology view and relatingit to the business plan. Some insurers have re-established researchand development groups within the IT department, naming theminnovation groups—talented technology geeks looking fortechnology enablement and, of course, a business case.

So what does this mean for the industry at large? For those thatwant to take a leadership position, it means stepping up the paceand moving faster to capitalize on new technologies and newapproaches. For those that see a fast-follower strategy as the bestcourse for their organization, it means increasing the agility ofIT architectures and the organization itself to be able to makeimportant moves more quickly. And, it means looking beyond theinsurance industry boundaries to determine exactly what tofollow.

The pace of change is increasing exponentially. All insurers, nomatter what course they decide to pursue, will need to stayvigilant and watch what is happening in the industry and around theindustry. In the not-too-distant future, playing catch-up may notwork as well as it used to. It's a big connected world out therewith lots of opportunity … and there are those that will not let itpass.

About the Author

Deb Smallwood, the Founder of SMA, is recognized for herexpertise in investing in technology to influence competitiveadvantage in the insurance industry. She offers a fresh perspectiveon how business capabilities can be enabled to meet strategicgoals. Exclusively serving the insurance industry, Strategy MeetsAction blends unbiased research findings with expertise andexperience to deliver business and technology insights, research,and advice to insurers and IT solution providers. Deb can bereached at [email protected].