Disruptive technologies have led to an immense amount of change, and business models are constantly challenged as a result. The insurance industry is no exception to this evolution. What was once a traditional business model for insurance is now being challenged by new thinking, new competitors, and new ways of working. Insurance leaders are seizing the upside of disruption and anticipating and adapting to these emerging needs — with the end result being a wave of innovation seen threaded throughout the insurance industry. 

Disruption, evolution and competition

To successfully be innovative, a company must have a strong understanding of the market's disruption, competition, and evolution, analyzing the entire insurance value chain. It is important to closely examine the three types of companies that embark on the innovation journey, as it is in their approach to products, distribution methods, and service models where true innovation is being realized:

1. Traditional players: Established insurance companies, with diversified businesses, strong distribution relationships and financial stability.
2. Digital entrants: New participants to insurance, typically focused on niche product offerings or services as a way to differentiate themselves.
3. Reinvented players: Forward-looking insurance companies who are adopting and implementing new technology systems into either a part of their business or at the core of their business.

Making innovation real

There are many industry influences to take into consideration when embarking on an innovation journey. Companies need processes and technology to quickly identify emerging opportunities. Focusing on these opportunities and the impact they have on the industry will help companies find their niche and launch their innovations. These opportunities can be found in many places, such as:

• Product design & distribution: It can be emerging risks, such as drones and cyber advancements, or a move towards on-demand insurance models, which are influencing the product design and distribution in the marketplace. 
• Underwriting & risk assessment: Automation of processes and the use of data and analytics have sparked advancements like hyper-personalization of underwriting and a demand for increased speed of service.
• Pricing & rating: Demand for enhancing pricing and policy rating sophistication has changed the way the market is running right now.
• Claims management: Big data and artificial intelligence have had a major impact on claims management, specifically answering the need of customers' demand for real-time and self-service.

Understanding one or all of these shifts in the insurance industry will be one of the beginning points that drive a company's innovation.

Innovate through inclusion

While disruption and competition may be subjective based on industry-sector and-specific business strategies, a constant throughout the insurance value chain is people. Building a diverse and inclusive workforce is a business imperative. More inclusive cultures that put a spotlight on diversity can stimulate innovation, enhance organizational reputation as well as drive higher levels of engagement among employees.