The insurance industry is doing more to innovate than at any time, but there is still a long way to go before it meets the growing demands of its corporate customers for new products and solutions. A report published by Airmic at its annual conference says insurers and risk managers need to work together and review how they go about their business in order to boost the rising but still low levels of cover purchased for non-traditional risks such as Cyber.
All parties agree that innovation is a good thing. Customers see it as a way to respond to the growing importance of intangible assets. Underwriters are aware that innovation has the potential for competitive advantage. 61% of insurers saw innovation as a core part of their growth strategy, according to a KPMG report in 2015. Yet, the report says, 49% of Airmic members believe their insurers are ‘hardly innovative’ or ‘not innovative at all’ in developing relevant covers. Only 1% view their insurer(s) as ‘highly innovative’.
“All the big gains the market has made in recent years have come about as a result of collaboration between the interested parties and a willingness to change the way they do things. Innovation is no exception. We can meet this challenge head-on as long as underwriters, brokers and corporate buyers work together and are open to new ideas,” said CEO John Hurrell.
The report says there needs to be cultural change among both underwriters and buyers. It identifies a number of specific factors.
“Insurers are working harder than ever to innovate and some areas, such as cyber, have seen notable progress,” said report author Georgina Wainwright. “However, the sheer pace of change within the business environment of their customers has left them struggling to keep up.”
The research, carried out earlier this year, involved interviews with insurance company executives, senior brokers and risk managers.