Editorial

There's a German expression that totally loses some “zing” in the translation that says: You can be old as a cow and still learn more. In the original language it rhymes perfectly, which probably is the genesis and perhaps charm of the expression, because cows generally don't live exceedingly long (about 15 years, I'm told, if they're not milked or don't wind up in a butcher shop). But the idea essentially is you're never too old to learn.

I learned a not very new term I hadn't heard before while chatting lately with a representative from an industry vendor. The term is co-opetition, and its origin often is credited to Raymond Noorda of Novell, who, according to Web site Co-opetition Interactive, explained: “You have to compete and cooperate at the same time.”

Another worthy quote on the site comes from Bernard Baruch: “You don't have to blow out the other fellow's light to let your own shine.” In other words, it's OK for a business to cooperate with its competitor, a concept that has been practiced for some time, certainly by many tech companies, including Microsoft.

It also has application closer to home. The concept seems to describe somewhat the relationship between carriers and agents–obviously while business may be viewed as war, as the clich? goes, carriers and agents are not enemies.

However, they do have their own self-interests, and that's where the relationship gets interesting. Everyone espouses the often cited goal of “ease of doing business.” But what about access to customers and their data? Or disintermediation of the agent? Each side may be understandably cautious in sharing, not wanting to cede customers to the other or, through agents, to competitors, not to mention each having a host of security issues.

While competitive strategies impact interorganizational relationships, there is much more business generated from cooperating than not, and the insurance industry recognizes it. This view is in line with a business technology trend put forward by McKinsey called “distributing cocreation.” According to the report: “Technology now allows companies to delegate substantial control to outsiders–cocreation–in essence by outsourcing innovation to business partners. . . . By distributing innovation . . . companies may reduce their costs and usher new products to market faster by eliminating the bottlenecks that come with total control.”

Anecdotally, it seems more insurers are bringing distributors into the process–for the good of both. For insurers, this may mean less control over innovation, but odds are the results of their labor will find greater traction–whether in systems to facilitate and grow the business or in new products the marketplace may have an appetite for. It may be early in the curve for co-opetition to derive full benefits, but there is a lot of potential to explore.