Making compromises is not unusual in any company where there are competing pressures–whether within or outside the enterprise. Ernst & Young has addressed the issue for property/casualty insurers with a report called "Focused Innovation."

"The norm in the industry is to react to these forces and look at them somewhat in isolation," says Chris McShea, a partner with E&Y. "When you do that, it tends to create tradeoffs, so you compromise a focus, a commitment, or an investment somewhere else when you are dealing with a single issue."

In its report, E&Y identified the issues that are driving the industry and looked to see whether it could find issues directly in conflict with each other. "If [carriers] were able to step back and work on two or three issues at a time–which we are defining as focused innovation–they might make a breakthrough in that space so they wouldn't have to make compromises," says McShea.

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