By Graham Newman, European Product Marketing Manager, FINEOS
We take innovation for granted in our daily lives. I doubt that any other generation in the history of our species has been confronted by as much innovation and change as we are. You don’t have to go back many generations to find a female ancestor of yours whose life was pretty much like her mothers’ and her grandmothers’, or a male who lived the same life his father and grandfather did. But us? We don’t live the same life this year as we did last year.
We experience innovation in new products and services and new ways of doing existing things in entirely fresh ways. But not all aspects of life advance at the same pace. Right now we probably experience most innovation in our private and personal lives, in other words in products and services aimed at the consumer. The business-to-business world now follows where once it led. It is naturally more cautious; resistant to change and finds it more difficult to implement, but that doesn’t mean that it will not change, or does not need to. Which brings me to the London Market itself.
I believe it is axiomatic that the London Market needs to be innovative. It will survive and thrive not by being the largest in the world but by being the most creative, by matching its expertise – not just to the growing and shifting range of risks and how to underwrite them effectively but to the services it provides when it delivers the claims that inevitably follow.
In researching a White Paper I am producing on innovation in the London Market and how FINEOS can support it I have come across a number of interesting questions, most of which I have not yet found definitive answers to. In this blog I want to share them with you and would be delighted to hear your reactions.
Does the market believe it is innovative?
One of the best ways to stifle innovation is to believe you are already doing it. Or rather, that you are doing it quite well enough thank you. As Roger Bickmore of Kiln pointed out recently in his blog ‘On Innovation’ a few good years in the London Market are not exactly conducive to a change of plan, nor is the tidal shift towards a ‘big future’ noted by Novae in its recent ‘Looking Forward’ research. Large insurers may have more capital and appear more secure and able to cope with the demands of regulation but smaller, more entrepreneurial companies tend to be better at turning innovation into profit.
I believe that there is a recognition in the Market that innovation is vital and that diversity should be maintained as it adds strength to the Market overall but I also hear concern that it is not delivering all that it could. For example, is the Market accessing the widest customer base, is it offering the quality of communication that other global markets are?
A simple comparison with the personal lines sector is “Who is the ‘Direct Line’ of the London Market?”, or indeed, is there one? Is there anyone who is about to, in that time-honoured phrase, (which is another way of saying I’m about to use a cliché but please forgive me), break the mould and change the game?
Where should innovation focus?
This is critical. It’s no good creating wonderful new innovations if they don’t add value to the business or improve profitability. A number of candidates spring into view:
- Should it be on technical expertise?
- On using the knowledge and experience of underwriting and claims history to improve decisions?
- On better communications?
- On new product lines?
Whatever it is, and perhaps it is in all of these and more, you can be sure that technology will be at its heart. It will either drive it with new powers hitherto unavailable or it will support new services and products. But that brings me on to a related and equally important question:
Can the Market embrace technology for the right reasons?
Can it choose the right technology and extract value from it without compromising its unique differentiators? This too is critical. We expect that new technology will improve things, make it easier to do what was once time-consuming or tedious, but the London Market has some very specific qualities that differentiate it and provide its unique value. New technology must reinforce, not replace the personal touch, must accommodate the face-to-face nature of doing business and must ensure that the trust the Market generates is preserved and strengthened.
One way to ensure this is to start with what the customers actually want. I shall deal with this in the next blog.
Your comments, as always, are most welcome.