While newer entrants to the insurance ecosystem bring fresh and innovative perspectives that challenge established norms, insurance experience remains crucial for sustained and impactful innovation. A healthy combination of both seasoned experts and passionate newcomers creates a dynamic and innovative environment that delivers more hits than misses and wins that continue to drive value over time.
Insurance as an industry must not only anticipate but welcome and drive change to provide financial protection within a world that never stands still. Competitive advantages and positive impacts are realized not only by how fast a carrier, Insurtech, or solution provider responds to change. A more significant edge and value can be realized when innovation and expertise intersect to make anticipatory and focused moves that challenge the current state and reflect a deep understanding of the market.
Within the insurance industry, incumbent carriers and vendors aspire to transform, and Insurtechs seek to create positive disruption. As evidence of the power of fresh perspectives and deep industry insights, we increasingly see more collaboration between incumbents and disruptors, including some carriers creating their own startups.
I have spent almost four decades in insurance—at an agency, a global carrier, a startup, as a consultant, and now as an advisor. This time has been filled with lessons learned by understanding the root cause of the successes, the failures, and the close calls that were pulled out of the fire. Over time, many varied experiences have taught me that some fundamental truths of insurance and change are as inevitable as gravity.
Insurance cannot transform in a vacuum. Instead, while embarking on a new path forward, carriers must continue to operate effectively and efficiently and maintain compliance with all regulatory rules and customer service agreements. Being strategic cannot ignore also being operational.
Sustainable and meaningful change within insurance can only be realized by having both a vertical and horizontal context. Transformation of a claim process must include testing for unintended impacts on the rest of the claim journey, along with downstream stakeholders, like underwriting. I learned the most about the total value proposition of claims by spending ten years in product and underwriting. I discovered that the insurance value chain is a repeating and interconnected cycle of sell, service, and renew.
Research by CB Insights and Failory reveals that a lack of product-market fit often leads to startup failures. Finding product-market fit can take 2-3 times longer than expected; in the interim, a product can be overvalued by more than 200%. Insurance carriers are prone to underestimate the effort but also the business value possible when modernizing their technology. These risks can be mitigated by incorporating insurance industry expertise and transformation experience early and ongoing.
Regardless of my job title, all of the roles I have held throughout my career have included being an advisor. As an advisor, I am a trusted partner who tailors the use of my expertise to the needs of each client. Sometimes my clients have been internal to my employer; other times, like now, they are carriers and vendors.
A key lesson I have learned as an advisor is that my value is maximized when I can participate early in a transformation journey. I know from experience that it is expensive and disruptive to pause, if not loop back, to reimagine and redesign a product, a process, or a go-to-market plan. I’ve had to seek executive approval to stop, evaluate, and rework a strategic program. That the data and the outcome confirmed it was the right move did not make the delay and additional cost any less impactful to the company, its employees, distribution partners, and customers.
My guidance to any organization contemplating change is not to forgo industry expertise until you have the budget for a full-time role, by which time you’re already months or years into your journey. Look for an advisor with both broad and deep expertise, not to mention the wisdom of experience. Advisors can be your industry toolkit, becoming or augmenting an organization’s own insurance experts and providing an essential outside-in, big-picture perspective.
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