On Insurers’ Radars
A panel of experts share tips for putting innovation into play. By Pat Speer
What are the benefits to implementing wild, “out there” ideas within a typical insurance organization? For one insurer, it resulted in a successful iPhone application that enables payment deposits.
For another, it panned out to successful development of
a niche line of ship cargo insurance that provides
unique coverage against risk of Somali pirates.
The ultimate benefits of such programs may be palpable, but getting an insurance organization to foster
and fund support for such ideas is not an insurmountable challenge. Such was consensus among insurance
executive panel participants at the CIO Insurance
Summit in Scottsdale, Ariz, in December 2009.
Led by Matthew Josefowicz, head of the insurance
practice at New York-based Novarica, the three-mem-ber panel offered candid insights into their respective
organizations’ innovation philosophies and tactics.
Josefowicz asked the panel to describe whether their
organizations had a formal innovation program, and if
so, how ideas that come from that program help eliminate operational redundancies, reduce processing time
and cost and deploy the most-efficient use of resources
to create a competitive advantage.
Andrew LaGravenese, CIO and head of innovation at
Warren, N.J.-based Chubb, said his company recognizes
two types of innovation: the day-to-day type that may
help optimize existing systems, for example, and the
“change-the-world” type of innovation. Creating a formal process for LaGravenese and his staff of four to follow, his team routinely seeks both types of innovation,
noting that both are typically driven by a business need
and, therefore, can obtain the appropriate funding.
Panelist Rickey Burks, VP, CTO, San Antonio-based
USAA, said his company tends to look at its innovation
program in a broader way, applying incremental strate-
gies to it. “This includes everything from the day-to-
day to breakthrough innovation that borders on science
fiction. We hope most of our innovations turn into
breakthroughs at some point, so we fund accordingly.”
In a risk-aversive industry, putting funding toward
raw innovation takes courage, Josefowicz pointed out.
“It’s often tied to measurable results,” he said.
ideas, and we are identifying people in the business
areas who are leaders in business innovation. During
brainstorming sessions, we look for people who might
challenge the status quo.”
LaGravenese agreed that millennials tend to bubble
up with great ideas, and says his company looks for
people who, during a brainstorming session, create an
avatar, or upload a picture—this is telling behavior. We
found a very high usage of IT among these people.”
Both Gay and LaGravenese concurred: The establish-
ment of a formalized approach that taps functional
teams is an effective way to give innovation a boost.
“For us, innovation is how we leverage what we
already have,” Gay said. “It’s how our teams approach
idea-building, using technology to extend an existing
idea to something unique.”
Burks agreed: “This is how we ended up developing
an iPhone deposit application,” he said. “We took the
‘deposit services’ that we already offered, and made
them available on an iPhone. This took a great idea fur-
ther—to our seven million members.” INN
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Insurers and Change—
Industry technology executives
at the CIO Insurance Summit
admitted that adopting the
changes required to innovate is no longer
9 Key Developments
The effects of regulatory
reform, increased govern-
ment intervention and
potential tax law changes
will keep stability at bay, at least for a few more
years, says a PricewaterhouseCoopers report.