Innovation and Insurance
Everyone talks about innovation, but all too often it’s just a buzzword that companies use to hype new products that are anything but innovative. Unfortunately, this is all too common in the insurance industry, where top-down directives are nothing more than rehashes of existing policies. It’s no wonder that when people hear the top brass at an insurance company talk about innovation, eyes roll and yawns are suppressed. That’s because most insurers confuse their own operational efficiency for innovation, rather than recognizing that a “better mousetrap” is still just a mousetrap.
Most insurance companies don’t innovate because their core business model is based on the principle that growth needs to be fed; as a result, the monsters are eating themselves because it’s always about “more” rather than “better.” In other words, no one has any real incentive to innovate because success is measured only by selling more policies rather than really reinventing the business to meet real-world needs. That’s a big reason why innovation gets killed in big companies – and why smaller, more agile companies are able to create new paradigms for insurance.
So is it really possible to innovate in an industry that has earned a reputation for repackaging the status quo as “new and exciting” every few years? The answer to this is an emphatic yes – but it requires insurers to stop thinking like…well…insurers and start thinking like their customers. That’s been our approach at ProSight Specialty Insurance since day one. We don’t just talk about innovation – we do it every day, and it’s the heart and soul of our products in the media space.
Exhibit A is our COMPLETE product, which allows us to simultaneously write film completion bonds and standard film insurance policies; very few companies do both at the same time. Why not? It all comes back to innovation, rather than simply doing business as usual. And for us it started with listening to what media companies wanted rather than what we thought they should buy.
The process typically starts with producers arranging coverages, including general liability, auto, production package, workers’ compensation, etc. Only after that is done can they secure a bond to guarantee that a project will come in on time and on budget. COMPLETE was created as a response to a simple question: why couldn’t this wildly inefficient and costly process be simplified through a one-step process handled by one insurer? It’s a good point. There is no practical reason why it should be a two-step process that costs producers time and money.
And so we innovated. ProSight created COMPLETE, which is a new process, built from the ground up, that lets media companies take care of their bonds at the same time as their other insurance coverage. This saves about a month (half the time of the usual process), and lets producers start earlier on projects, reduce costs and ultimately let them focus on what they do best: making movies.
Innovation is about looking at the world from a new perspective, and for insurers that means getting out from behind 50 years of doing the same thing and really looking at what the market needs. We’re happy with what we’ve done by building COMPLETE, but – even more importantly – so are our customers.