Get the buy-in of key stakeholders to answer critical questions
How tightly are you going to couple your investment with the core business? Do you want it to affect the core within one to three years? What ROI do you expect to achieve? And what happens if you don’t reach that goal?
Getting buy-in for InsurTech initiatives can be a constant struggle, but it’s worth the effort. Don’t try to force colleagues to see the wisdom of innovation investments, but instead involve people organically throughout the organization with various innovation projects. Show them how innovation can help improve business results. Most importantly, look for a few quick wins. There’s nothing better than tangible results to help people see the value of your program.
Choose the right people to lead your InsurTech program
Too often, we see companies install a leader with no relevant background as head of an innovation unit because either the person wants to move to Silicon Valley or is close to the firm’s leadership. The innovation unit becomes a parking place for these managers, with predictably negative results. You’ll want to choose a leader with real-world experience in getting innovation off the ground—or the wisdom to hire someone who does. Look for someone with a forward-thinking attitude, perspective and personality needed to drive change, and concrete experience growing revenue for the business.
Don’t expect immediate results
While some short-term InsurTech projects can generate an immediate return on investment, you shouldn’t judge all projects using the same metric. Many carriers often move on to something else without allowing the current initiative enough time to generate returns. This is particularly true for companies pursuing InsurTech distribution opportunities, as they identify sales growth as the most important innovation metric. This can lead to a bias for short-term results and deter companies from making wise innovation investments that can pay off over the long haul.
We encourage our clients to strive for a healthy mix of quick wins and long-term aspirational projects, using metrics that make sense for each project. And, yes, there may be cases where you’ll treat some innovation projects as purely experimental, without any formal measurement.