Innovative thinking can be a challenge and, generally, innovation is too often quickly dismissed in our industry. It's commonly misunderstood, with critics suggesting it requires an investment akin to gambling. Or, they say it's impossible to be truly innovative in the highly regulated financial services industry. I disagree.
First, let's distinguish innovation from invention, because people often confuse them. Invention is about the creation of new things, which manifest primarily as products. Innovation is about the introduction of new concepts designed to improve something that already exists. Both can differentiate, but innovation offers a wider range of possibilities.
As I visit with other leaders in the industry, too much of the dialogue about product innovation fizzles into a discussion about commoditized products and stifling regulation. But there are lots of different types of innovation. They can be about how products are distributed, how customers are serviced or how capabilities enhance the experience. They can be ground-breaking advancements or creative tweaks. Let's look at a few examples that have emerged over the past few years.
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New processes: Express underwriting programs are using "big data" to surgically identify risks that need to be more closely evaluated, speeding up underwriting to as little as 48 hours on clean cases. Mobile devices can now be used to capture images of and wirelessly submit health care receipts for adjudication. These two examples are actually in the market right now. And they differentiate.
New capabilities: Traditionally, most employee benefit providers manage relationships with employers only. But in the voluntary space and given the era of personal responsibility, a carrier's ability to manage both the relationship with the employer and the relationship with the employee is imperative. While this capability is rare, it's being done. What's more, it differentiates.
New experience: Needs based one-on-one counseling by salaried enrollers in the local market is a new experience for many employees going through the group enrollment process. And the advent of private exchanges is another example that applies to both the employer and employee experience. When these strategies are done well, they differentiate.
The thing about innovation is that it's sometimes difficult to recognize when it first manifests and it doesn't come with guarantees or assurances. Instead, it requires a leap of faith because it means trying something that hasn't been done before. That's why there needs to be some tolerance for failure. Still, carriers willing to innovate will get some things right and, in doing so, will set themselves apart from the competition.
So, while some carriers look only to product and distribution as a way to grow, some are leading with innovative new solutions — solutions that will change the experience and be differentiators. Find and partner with them because these will be the carriers of choice in the future. These will be the winners.
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