All the time we hear about: We can’t afford not to innovate… Why innovate when we are growing profitably today?
Innovation is an essential ingredient to sustain success. Without any innovation, the traditional business of insurance will become obsolete. We talk about “think big start small” and the list goes on and on.
It’s true, innovation is critical to success today and for positioning for tomorrow. But, rather than peddle the same old innovation benefits and business rationale, I thought it would be refreshing to share 10 facts about change and innovation that will directly affect insurance and that may inspire you, surprise you, or reinforce why you should be continuously improving by rethinking, reimagining, and reinventing the business of insurance!
1. Younger generations like millennials and Generation Z are going to be the biggest consumers in the market in next 5-10 years.
Make sure you can reach them. They will not use paper applications or have a personal face to face meeting, but they will be searching for options from their phones and cars. A typical mobile user checks their phone over 100 times a day.
See also: 17 ways to better market to millennials
2. Innovative workplaces attract the best and brightest talent.
Today, word of a stale, outdated work environment spreads fast. Don’t be one of those employers. Invest in talent, but also invest in your infrastructure and creating an innovative workplace.
3. A majority of insurers (65 percent) have focused on innovation for five years or less.
You aren’t alone, and surprisingly, you probably aren’t far behind. With the right focus, you can make remarkable strides in a short amount of time (SMA Research: Innovation in Insurance: Expanding Focus and Growing Momentum).
4. 80 percent of all crowdsourcing is done by small business and start-ups.
Embrace the crowd! It is often the most cost-effective way to generate new ideas. It isn’t just for small business and start-ups: big business loves the crowd, too. Just look at McDonald’s crowdsourced burger or Apple’s crowdsourced mapping tools.
See also: Social-media lingo, Part 1
5. The amount of stored data doubles every 24 months.
The U.S. Census estimates that the population has grown over 27 percent in the last two decades. Changing demographics, aging citizens, and diverse populations are literally changing the face of data accessible to insurers.
In order to stay on top of it, you need a data and analytics strategy that makes the most of the new data available.
6. Wearable devices have grown 200 percent every month since 2012.
This doesn’t mean that wearables won’t eventually be replaced by something else or evolve. It means that wearables are growing so fast, it makes sense to try to tap into some of that innovation and apply it to your own organization, your processes, or even your products (2013 Internet Trends).
(Photo: In this Feb. 5, 2015 photograph, patient Gary Wilhelm, 51, looks at his medical data on a smart phone that is synchronized to a new Fitbit Surge that is on his wrist during an examination. AP Photo/Mel Evans.)
7. It is six to seven times more expensive to acquire new customers than it is to keep existing ones.
One risk of not innovating is that you may start losing customers who can find better, easier-to-use alternative insurance options.
Studying consumer behavior might be the best indicator of market trends and areas to innovate. Don’t lose renewals because you haven’t kept up with market demands.
8. Over 40 percent of the companies at the top of the Fortune 500 list in 2000 were not on the list in 2010.
The digital age shuttered many long-standing businesses. Some experts think that in the next decade, businesses that do not embrace innovation or adapt to market demands will suffer the same fate. Insurance is not immune to this phenomena. Today, everything is connected.
See also: Infusing future into your strategy
9. Just 10 percent of cars were connected to the Internet in 2012, but by 2020 it is estimated that 90 percent will be.
It is amazing to think of how quickly we are witnessing innovation expand. What was once an outlier is now a standard.
10. Internet of Things (IoT) technology has the potential to add $10 to $15 trillion to global GDP over the next 20 years.
The Internet of Things is big now, but it won’t be as big and as impactful forever. Like the connected car, IoT will eventually become standard. What insurers chose to do with the new data available and the amazing growth potential will ultimately make or break them (Internet of Things Market Statistics-2015).
These facts are inescapable. Not only is innovation here, but the statistics are astounding. The time to embrace innovation and become the Next-Generation Insurer is now.
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