What's the common denominator? Carnahan said it's “this megatrend we don't talk about a lot. It's collaboration. It's bringing the consumer into every aspect of the business, becoming their own agent online, configuring their own products. How do you regulate the process?”

Insurers that don't respond quickly enough to these consumer-centered trends risk being left behind, as the Novarica report suggests. Yet many carriers remain mired in legacy practices, such as manual claims processing with 30 percent of carriers still manually investigate claims, according to the report. They also have been slow on the whole to innovate, for a variety of reasons. In addition, there naturally has to be a balance between responsiveness to consumer needs and new technologies, sensitivity to privacy concerns, and the need to maintain operational efficiency.

“Not everybody is going to get 15 quotes, because they value their time too much,” said Peter Settel, senior vice president and chief information officer for Homesite Insurance. “Consumer groups are not totally rational. There are resistance points, and some have a higher threshold for privacy than other folks. That may change as they acquire more assets, or more family members, over time. It's really complicated because of that; 'one size fits all' only works if your customer is homogenous. Maybe it used to look like that, but that's no longer the case. As the consumer matures, it makes our job as insurance companies really complicated if we want to be growing in those channels. A few companies will be the innovators and have market share, and others will have to follow these brand leaders. [They will have a] time-to-market advantage on continuous innovation, [putting] a huge distance between [themselves] and the rest of the industry. You're seeing that play out,” he said.

The Novarica report also points out that while more and more insurance carriers either have replaced or are in the process of replacing their claims systems, those that have not done so are finding that these aging legacy systems are increasingly expensive to maintain, inflexible, decoupled from policy and customer systems, and rooted in financials and compliance and not customer service. That would appear to spell doom to the insurer that can't extricate itself from legacy thinking and systems. The report, based on a survey of nearly 100 carriers, found that while innovation is certainly under way at many companies, 25 percent of those surveyed are merely maintaining their existing claims processing systems, and 41 percent are making only “minor enhancements.”

In the category of first notice of loss alone, which is a critical touch point for consumers with their insurance company, the Novarica report found that while over a third of carriers responding to the survey offer multiple channels for reporting claims, only 40 percent are able to give claimants specific advice at the time of claim. Further, only 45 percent of carriers provide instant access to policy and detailed coverage information at time of claim. The report further noted that larger carriers are much more likely to have multiple intake channels for claims, and that those companies whose claims processing systems are five years old or less were “significantly more likely” to provide direct support during the FNOL process than those whose systems were older.

So it's no surprise that while innovation is definitely happening in some quarters, quite a bit more work remains to be done. No doubt there will be some slipups along the way.

“To be an innovator, you have to break out of that [legacy mindset] and take responsibility, but you're going to mess it up a lot,” Settel said.