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The Objective of this paper is to understand the insurance industry’s approach to innovation Our research has identified a substantial and growing appetite amongst insurers and brokers to produce innovative responses to emerging client needs This paper aims to identify the challenges faced by insurers when trying to innovate and considers how members can work with their insurers and brokers to achieve the best result possible
The need for innovation within the insurance industry is an ongoing discussion point for Airmic members, insurers and brokers . Innovation is important to the industry for a number of reasons:
- Insurers, brokers and Airmic members are looking for insurance cover that meets the changing risks of businesses and the world they operate on, particularly as business models shift towards a greater reliance to intangible assets, which don’t necessarily have the protection through traditional insurance covers .
- Insurers are aware that innovation has the potential to enhance their business models and lead to competitive advantage and growth, particularly as the soft market continues to persist .
- Insurers and brokers are conscious that the industry has essentially operated through the same business model for over a century, and therefore the potential for disruption from new entrants and new technologies is a growing concern (as is already being seen in the personal lines markets) .
Perhaps unsurprisingly, “the ability to manage change” was the largest rising concern for the insurance industries according to the (PwC Insurance Banana Skins survey 2015), as insurers, brokers and observers become increasingly concerned about the changing risks and technologies . However, despite the mutual awareness of the need for innovation from all parties Airmic members report that ‘lack of innovation’ is their greatest concern with regards to the market (Airmic pre-conference survey 2016) .
This paper aims to understand why a gap exists between the apparent focus on innovation, and the level of innovation seen by Airmic members . Airmic endeavoured to understand the concerns of its members through a survey and a number of interviews and roundtables . A variety of insurers and brokers were interviewed to provide a view on how they approach innovation, and the challenges they face when doing so