One of the words technology people love to use is innovation. Things change so quickly—thanks to technology—that even insurance carriers are getting caught up in the drive. Of course, calling some technology advancement innovative doesn't make it so.
Here at the ACORD LOMA Insurance Systems Forum, one of the themes is innovation. It is certainly something to strive for, but a new mobile app is not innovative to the insurance industry, although for a 100-year-old regional insurer in theMidwest, it may seem that way.
Craig Weber, the CEO of Celent, feels insurers that want to be seen as innovative have to look beyond their nearest competition.
"Borders are artificial when it comes to ideas," he said.
Insurers need to look globally, believes Weber, when they seek innovative ways to do their work. The next great idea may come fromMalaysiaor The Netherlands, although that suggests we look for someone who comes up with the next great idea and then borrow it.
Weber doesn't see enough "thinkers" in insurance. One reason is few companies can afford to pay someone smart enough to simply sit back and figure out what is going to happen in five years or beyond.
Insurers may talk about being innovative, but what they want more than anything is to be more profitable than they were in the last quarter. There's certainly nothing wrong with being profitable. None of us would be working if our companies weren't profitable. But at some point in time we have to look further out than 12 or 24 months.
Weber has been preaching "creative disruption" for the last six months and one of Celent's senior analysts, Donald Light, last week published a report speculating that the personal lines auto business could have a completely different business model by the middle of the next decade.
Weber himself wonders if a major technology company—one that isn't into insurance or insurance technology—could one day look at the insurance model and say, "I can do that."
Weber knows broaching a topic such as this would be unpopular in the insular world of insurance and he adds, "We don't have to agree on the timeline."
Waiting for the next big change in technology will undoubtedly be the course many insurers follow, but that, of course, would not be a very innovative way to do business.
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