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The Will to Innovate

Editing over 300 reviews for the Digital Insurance Library over the last few years I’ve observed some dominant themes. 2015 was the year of core legacy transformation; 2016 was the year of big data analytics; 2017 was about organizational agility and speed, and 2018 is thus far shaping up to be the year of ‘customer-centricity’, a relatively new term with implications beyond technology and building more responsive UIs.

One of the most customer-centric scale businesses on earth, we can all agree, is Amazon. Yes, Amazon is a technology company, but what makes Amazon so intensely customer-centric has nothing to do with technology at all.

YouTube clips of Amazon’s Jeff Bezos date all the way back to 1999, Amazon’s nascent years, when they were still just an Internet bookseller. Through the years, then to now, in a world where so much has changed, what’s striking about Mr. Bezos’ approach is what doesn’t change. In every clip where he talks about his role as Amazon CEO, he says his job is to identify the ‘big ideas’ and force organizational execution against them. Amazon’s three big ideas are and have always been: low prices, fast delivery, and vast selection. People, he says, will never not want these things.

This simple approach is actually tricky to implement as it requires Amazon to put its money where its mouth is, risking or even sacrificing revenue for stated principles.

For example, in the early days, the Amazon website featured a script across the top of the main shopping screen advising: YOU LAST BOUGHT THIS ITEM ON (SUCH AND SUCH DATE). Amazon’s marketing and finance people wanted it removed as it seemed counterproductive to orders and revenue. But the decision was made to keep the notification in place (it’s still there today) as Amazon, 1) didn’t want customers buying duplicates of stuff they already had and didn’t need, and 2) returns would add to operating costs, adversely impacting price.

A second example is something we now take for granted: the customer review. Amazon pioneered the idea of letting readers review books and at first publishers were furious, for obvious reasons having to do with negative publicity. Under threat of boycott from their main source of book supply, Amazon stood strong. In the words of Mr. Bezos, “We told publishers, It’s not our job at Amazon to make a sale, but to help our customers make an informed purchase decision. The reviews are good for us, and, over time, they’ll be good for you too”.

Amazon’s three big ideas are the foundation for their success, but it’s their will to innovate around the ideas that makes the magic happen, setting Amazon apart, fueling sky-high customer loyalty ratings.

What are the big ideas in insurance? What do insurance customers want? A better way to ask the question is, what will insurance customers never not want? Various surveys published in the Digital Insurance Library within the last year tell us insurance customers want, 1) proper policy fit, 2) the lowest possible price, and 3) cheques—not lawyers—at claim time. I think we can all agree these three ideas are fairly obvious and stable over time. You can force execution against them and win.

But when it comes to customer-centricity identifying the big ideas, what really matters to insurance customers, is the easy part. Finding the will to innovate around them is the real challenge, the larger and more historically successful the company or carrier has been.

Recently I was caught out in a hailstorm, incurring considerable superficial damage (if that makes any sense) to our car. Unsure whether to file a claim or pay out of pocket to keep our claims record clean, I paid a visit to our local agent for a conversation.

“You’re deductible is a thousand dollars,” said the agent. “Do you want to file a claim?”

“I think the repair is going to cost around that much,” I said. “I’d rather just pay out of pocket to keep our premiums down.”

“That’s probably a good idea,” said the agent. “Given the rating environment.”

“Your company insures fifty million vehicles,” I said. “With deductibles trending up, and hail damage being pretty common with extreme weather and all, do you have a network of paintless repair shops that give your policyholders preferred service or a special discount?”

“No . . . Sorry. But I think we’re looking into it.”

Walking into my agent’s office thinking about hail damage, I walked out thinking about the will to innovate, or lack thereof. The difference between “looking into” a program saving policyholders money on dollar-one repairs, and standing up said program.

So as we head into the summer of what figures to be the year of the insurance customer, let’s all remember that without the will to innovate, customer-centricity is just another buzzword.

On the topic, our first Global LiveFest is coming up in November. With over 6,000 registered guests already, it figures to be a great forum for trading ideas and sharing experiences around digital innovation in insurance. Do you have the will to innovate? Do you have proof? Then tell the world about it by nominating your idea (and your team) for one of our Insurance Innovation awards. Please contact me at tom.bobrowski@the-digital-insurer.com to get the ball rolling.

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