Insurers are Goo-goo Eyed over Google
To say we at Strategy Meets Action struck a nerve in the industry with our research report Google and Insurance: Far Reaching Implications is an understatement. It set a record for downloaded and purchased SMA research, generating a torrent of follow-up calls and discussions. It has been shared and used by executive teams for discussion and strategic planning.
So why has there been such a strong interest and reaction in the industry?
Well, one reason might be there is a fascination and admiration for the competitive drive in Google`s transformation from a search engine to an innovator of new technologies and solutions such as Android, Google cars, Google glasses, wearable devices, and others. Then there is the fact that they are securing a strong, growing (and enviable) customer loyalty.
Don`t overlook their challenge to other innovators like Apple, Amazon and Microsoft. It`s impossible to ignore, just like their impressive growth and financial results, but the appeal that underpins all of this is Google`s unwavering vision for making information universally accessible and useful. And having a huge imagination that is spearheading innovation in multi-dimensional ways doesn`t hurt either.
As Google drives innovation, offering an integrated and seamless customer experience and making available the use of their groundbreaking technologies to people in their everyday lives, the levels of customer intimacy and loyalty continue to increase. And in the opposite direction, the vast amount of data becoming available via some of these technologies concerning individuals and their cars, homes, and bodies is breath-taking. And it will be transformative!
This is why the implications for insurance are so great. Google is bringing an outside-in, customer-driven approach to innovation that is causing insurers to rethink, reimagine, and reinvent their visions of a technology enabled future. Google is organizing data, technology, and location around people, creating a new level of customer empowerment and centricity unheralded in any industry, let alone insurance. Not only is this powerful, it is fundamentally changing the business of insurance.
Innovation is no longer just a nice-to-have initiative. It has become a must-have, strategic, core mandate that will define a new era of winners (and losers). Why? Because the increasingly rapid pace of change is challenging decades of business traditions and assumptions and demanding a response. This is unprecedented in the history of the insurance industry. And all the while, the changes just keep coming: new technologies, the mash-up of technologies, and new uses for these technologies.
These changes are highly disruptive but they are also transformational. One industry innovation leader that we recently spoke with about innovation noted: “There is an outrageous level of individualism—from devices, data, and components—that will break the traditional infrastructure, culture, and systems of traditional insurers.” Companies like Google, Apple, Uber, Zipcar, and others, as well as next-gen and emerging technologies are intensifying this level of individualism.
Many insurers, large and small, are struggling to get their heads around a comprehensive view or a full understanding of the impact that these influencers will have on the disruption and transformation of the insurance industry. That is why the Google and Insurance research report has provoked such a response in the industry. It provides insights and a glimpse of the challenges and opportunities for the industry. It also points to why, as an industry, we need to rethink how we respond to and embrace innovation as the core of a new culture and keystone of a new future.
Other industries, from retail to books, music, and movies, have experienced the same thing the insurance industry is now encountering: the very foundations of their businesses are being challenged, requiring novel thinking, experimentation, innovation, and adoption of the new and emerging technologies. As one industry leader and CIO recently commented, “Insurers must build knowledge, a network, and an ecosystem of outside-in relationships to reimagine and contribute to their company`s future.”
This persistent and continual disruption will necessitate a new way of embracing change and innovation. It will require a culture and model built around ongoing collaboration and ideation that extends outside the traditional insurance organization. This is why an innovation mandate is critical.
The innovation mandate must track and assess trends and influencers both inside and outside the industry, prepare plans and scenarios, experiment, and collaborate in order to gain competitive advantage. Unfortunately, the day-to-day operational demands, time constraints, and shortage of expertise or resources for evaluating the many implications for insurance will find most insurers unprepared or unequipped to respond to this level of disruption.
More troubling is the way that many insurers continue to operate with the long-standing approach of wait-and-see or being a fast follower. With the accelerating release of next-gen technologies, eager competitors, new influencers, and increasing customer demands, failing to adopt a culture of innovation and collaboration could create a potentially unsurmountable risk to survival of the business.
For insurers, the coming years promise unparalleled opportunity to increase their value to their customers. Those that are best able to capitalize on the key technology influencers will reap the most in rewards. In contrast, those that do not prepare for the future will find themselves falling behind, losing both competitive position and financial stability.
To capture the full potential, insurers must determine to create and participate in an ecosystem of outside experts and resources; inspire their leadership; and enable their journey of change, transformation, and innovation. Why will this be so important? Because the ecosystem network will integrate new ideas and thinking from outside the organization, and provide that outside-in perspective needed to break legacy assumptions.
The innovation journey toward rethinking, reimaging, and reinventing the business of insurance has started. And Strategy Meets Action has joined the journey. Have you?
(Contact Garth at email@example.com if you`d like to learn how SMA can help you on the innovation journey and opportunities for the insurance industry.)