Achieving innovation in insurance
The global insurance industry is staging an impressive comeback. According to McKinsey, in 2014 the industry was anticipated to grow at 6.3%, nearly three times 2013 growth figures with total premiums reaching EUR 3.8 trillion, higher than nominal GDP growth for the first time in five years.
Figure 1: Global Insurance Premium Growth
Emerging Asia had the highest potential growth at 15%. The Life insurance industry across both Maturing (9%) and Emerging Asia (14%) lead the world in business growth and Return on Equity (RoE). Health insurance also showed steady growth in 2014 with Emerging Asia displaying an impressive 31% growth in premiums albeit the region is still in its early stages of development.
The changes occurring in the marketplace arise from a convergence of factors including governments pushing policies and responsibilities for public health into the private sector, a growing middleclass in Asia that demands better service and value and showing a willingness to pay for the premiums, and better access to information across multiple platforms and devices.
In such an environment, insurers must not only focus strategic intent but across a wider area of concerns including better financial and risk-pool management, M&A, and also developing innovative, growth-oriented products that can secure the loyalty of existing customers and attract new ones.
For industry leaders, technology presents a clear enabling platform changing the competitive dynamic. The internet and mobile are spurring innovation that reach out to a wider customer base, and opening doors to more efficient and effective ways of delivering products and services. The result is potentially entire new business models.
Fortunately, the insurance industry has plenty of examples from other sectors to guide it as it waddles through the pools of change on their journey to innovation and success.
For example, the Toyota Production System and Progressive Insurance share a common secret to success – they employ operational innovation to achieve outstanding results. In the case of Toyota it is about perfecting the manufacturing and logistics at Toyota to achieve high levels of manufacturing efficiency while rooting out waste. For auto insurer, Progressive Insurance, it was reinventing claims processing to lower its cost and boost customer satisfaction and retention.
For AIA Group, innovation is about how to deliver better value and services, and create a new experience for customers that gives them a new way of doing business with the company. The AIA Accelerator program is one of the company initiatives in supporting innovation.
The AIA Accelerator program 2.0 focuses on supporting start-ups in the healthcare arena to deliver break-through innovations and technologies that are aligned around helping customers live longer and healthier. Steve Monaghan, regional director and head of Edge at AIA Group, says that at AIA innovation is about step changing the customer experience. It is about delivering better value, better access, better quality, and creating new experience with customers giving them a new way of doing business with AIA. “Or completely changing the way they interact with the ecosystem that surrounds AIA,” he explains.
The AIA Accelerator is now on its second phase and open for application. According to Monaghan, many of participants in the first phase of the AIA Accelerator program used personal experience as one of the key pillars for starting the business. For AIA, part of the driver for pursuing the program is about learning from what is happening in the community and industry. Watch the video for more insight.