Page 21 - Insurance Times March 2022

Disruption has already begun and not everyone will succeed business unit and functional silos, and long-entrenched
in it but rather, it is the players who have the courage to processes and culture.
commit to an identity based on what truly differentiates them
will have the opportunity to shape the insurance industry of The challenge could only increase as the rate of digitization
the future and those are the players who have realized need accelerates, consumer expectations keep rising, and
of Innovation in Product Development. traditional borders between lines of business continue to blur.
This is happening rapidly throughout the world. The Real
In a highly competitive industry, which is traditionally not transformation remains slow, even though the focus on
known for innovation; changes in demographics, technology, modernizing product and service development appears to
channels, and business models are creating significant new be high.
opportunities for insurance companies to defend market share
and increase revenue as well as margins. With new risks emerging, and traditional coverage requiring
updates to stay relevant in the evolving landscape, the need
The need to innovate, and to do so quickly, is now deemed for more rapid product development transformation seems
critically important by 88 percent of insurance companies. to be intensifying. Many companies are obsessed with coming
However, innovation can come in different forms; insurers up with the next Uber for their industry. For that reason,
can reach across business lines and functions to build teams they are overly focused on disruptive innovations, meaning
specifically focused on product innovation, using shared new products or services that completely upend existing
incentives. This may help raze the siloed models currently in markets or create entirely new ones.
play throughout the industry. With digital technology and
data redefining the market's entire value chain, customer Insurers are likely be tasked with eliminating or minimizing
touch points are shifting to mobile channels; while friction throughout their business models, processes, and
standardized products of the past are transforming to infrastructure. This could require revisions to the industry's
customized or new niche products that reflect customer traditional ways of doing business, such as the potentially
needs. Furthermore, the industry is expanding its scope of onerous and difficult-to-understand application process small
services by leveraging its connection to relevant industries business owners may face when trying to obtain a policy.
such as healthcare.
Instead, insurers should evolve toward creating a more
Customer Services and Product seamless, customer-driven experience that incorporates

Development tailored options and services, which is already table stakes
for most other industries. The method of focusing over
The insurance industry in general, and those targeting the traditional ways must be changed. Insurers will likely need to
small commercial segment, seem to be coming to terms with eliminate or minimize friction throughout the value chain,
this new reality of product innovation. Many insurers are
from product design through deployment and customer
reconsidering outdated product-driven business models to engagement, to respond to customer needs and market
meet customer experience-driven market expectations. At
opportunities more nimbly and effectively. Making these
a time when exceptional client experience is pervasive
changes would require internal multifunctional teams to work
throughout most other industries, customer-centricity, speed,
more seamlessly.
and flexibility are becoming essential in insurance product
development. Firms might also need to align themselves with external
business partners, such as data vendors and service providers,
Many companies such as Bajaj Allianz, ICICI Lombard raise as ecosystems of product and service offerings become more
the level of customer expectations for products and services integrated.
that are convenient, fast, and personalized, the insurer of
the future will likely need to follow suit. And, for all intents While product development and modernization initiatives
and purposes, that future is now. may be implemented in tandem or in succession, ideally, they
should be prioritized in line with a firm's overall strategic
There are various factors which creates hindrance to product focus. However, it is not always necessary to come up with a
development such as time to market and agility remain slow grandiose silver bullet idea in order to innovate.
and unwieldy for insurance product development, due to
cumbersome regulatory oversight, legacy infrastructure, In fact, these kinds of projects have high risk and have a low

The Insurance Times, March 2022 21