Tom Hardcastle (pictured), partner at Ninety Consulting, looks at the quiet revolution going on in the industry 

Insurance is undergoing a quiet but increasingly visible revolution. Driven by consumer appetite and need, digital capabilities, data-everywhere availability and new competition, the traditional insurer is faced with the choice of adapting and innovating or to stagnate and fade away.

But how should an insurer go about prioritising its investments in both new and existing products? What should the balance be between launching radical new propositions versus iterating existing ones?


Traditional insurance products remain today the commercial lifeblood for most companies. As a result, business cases tend to favour incrementing existing profitable products rather than risking investing into the ‘unknown’ in comparison. However, the ‘unknown’ could well be the future for the insurance company.

The rise of micro-insurance, the connected home, autonomous mobility solutions and the like demonstrate that others are finding a way through to launching and growing potentially transformational products and services. So how best to go about it?

Progressive insurers have been setting up innovation teams either within or outside of their regular operating models. So far, it would appear that optimal success, measured through the scaling and commercialisation of new products and services, is best achieved through innovating within rather than outside the organisation.

If the idea proves successful in market pilot, commercial viability is only achieved through successful scaling and this is where the new product or service butts up against the traditional product which has been/is being incremented. It should be stressed that any ‘live’ product should be being continuously developed and evolved, whether traditional or cutting edge. However, there are decisions to be made about what is current and what should be deemed legacy. Succession planning is nothing new when it comes to employee structures but is relatively immature when it comes to products and services.

Behind new service offerings are significant changes to operating models, often impacting current models, processes and practices. Take the example of digitised self-service backed by robotics and AI replacing the current contact centre and intensive back office processing. As this example illustrates, investing in new products and services cannot be done in isolation from considering, adapting and investing in the business models that sit behind them.

The prize for insurers who manage the transition from traditional to contemporary is huge. They will be relevant, meeting existing and upcoming customer needs and desires with attractive products and services. They will have efficient operating models which are able to change and adapt as the customers and markets they serve do.

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