This afternoon, I ventured 20 blocks uptown from Insurance & Technology's offices to attend the 2007 Gartner Financial Services Technology Summit, at the New York Marriott Marquis. And contrary to popular belief, I went for more than just the free lunch.
Between meetings--including a very interesting one with ITM, a player that's gaining interest amongst insurers--I was able to attend a few track sessions, namely one directed by Annemarie Earley, managing vice president, insurance industry advisory services, Gartner.Earley, who spoke on "Balancing Innovation and Proven Practices for the Insurance Consumer," told attendees that an insurer's ability to innovate is largely dependant on its level of risk acceptance and organizational cultural change.
"It's a cultural shift, not a technology shift," Earley told the audience. "I wouldn't want you to believe that you can go back to your office tomorrow and start innovating. It's a longer process than that. You have to have the right infrastructure, the right commitment from senior level people and the idea of what it is that is important to the fabric of your organization that may require innovation."
In order to innovate, some risk needs to be involved, Earley says, and that acceptance of that risk needs to be a part of company culture. "Don't go wild and accept any ideas that come down the pipe. You have to understand your risk appetite," she explains.
Earley did mention a few technologies that could help support innovation, such as business intelligence, modeling and analytics, but also cautioned against implementing new technologies specifically to increase innovation.
"Use what you have. You get so invested in the new technology that you can forget about the innovation and creation," Earley says. "Be more creative with the innovation part, and less needy with the technology part."
From an organizational standpoint, Earley pointed to Humana, the Louisville, Ky.-based health insurer with recent innovations such as real-time claims capabilities. Humana has an innovation team with dedicated employees. However, twice a year, someone from the innovation team is moved to the business team for a six month period and vice versa.
"It's not a complete move. It's just one or two people, so that innovation staff members understand the business and can replicate and design in a way much more in tune with what is need," Earley relates.
Further, business team members gain insight into the processes the innovation team goes through, such as efforts to create a business case for a given project--helping reduce animosity on the part of the business team members who may believe that the innovation team has little day-to-day work. "That's really not what the [innovation team] environment is like, but that's what people think. It takes the mystique out of the innovation team. When you move them in and out of that environment, the jealousy-factor goes away. Misconceptions of what happens are changed."
To finish the presentation, Earley left attendees with several recommendations, such as taking on innovation only with a commitment from management, making sure your understand your company's own appetite for risk and making a good business case for every new idea.
Posted by Nathan Conz