It’s hard for me to believe that it’s already time for another Property Innovation Summit (PINs) – the insurance industry’s top conference on innovation. I didn’t think we could top last year’s speaker line-up but read on….
Harvard Business School Professor, Clay Christenson, took the stage first. Christenson is the author of “The Innovator’s Dilemma” – the widely acclaimed business book that essentially argues that great companies can fail precisely because they do everything right. “Disruptive businesses” by definition may have lower gross margins and smaller target markets so are not particularly attractive to mainstream companies who ignore them at their peril. Christenson noted that customers typically don’t announce that they’re defecting – they just disappear, as Blockbuster learned the hard way after Netflix erased their market. “Non-consumption” or consumers that don’t participate in a market because of expense or accessibility is frequently one of the biggest markets. The Model T and the early Sony portable TVs were great examples of products that made revolutionary new technologies accessible to the mainstream.
Christenson also devoted time to the concept of understanding “the job that needs to be done.” Too often customer and market research doesn’t take this into account. Ikea is a great example of company that has nailed the job of “furnishing your home or apartment overnight.” Christenson dismissed regulation as an excuse for not innovating – noting that early mutual funds companies were able to successfully circumnavigate regulations against paying interest on a consumer’s checking account to great success.
Christenson concluded his presentation with a warning to his alma mater about recognizing the growing popularity of online education as well as cautioning businesses in general about only investing for efficiency vs. growth.
Next up was CNN analyst, and noted author, David Gergen. Gergen is now with the Kennedy School (also at Harvard) and spoke without notes or slides, making clear that managing change was critical to effective leadership. He cited techniques the military used in leveraging up-to-the minute reports and information as quickly as the next day to train recruits. Creative leadership is staying ahead of change so that you can shape it and ultimately control your own destiny. Gergen compared New York and Detroit in the last couple of decades, noting that New York not only survived but thrived – largely because of strong leadership. While Gergen lamented a climate of “general mean-ness” in Washington that makes it difficult to get anything done, he still characterized the US as having the “best hand.” As the most innovative society in the world, we continue to attract talent and ideas. Gergen cited 3D manufacturing, robotics, and some of the initiatives on oil drilling as examples, arguing that countries should be measured on the ability to innovate vs. GDP. He concluded by noting that good leaders need to attract and know how to work with the growing Millennial population as well as returning soldiers.
The next session took the format of a Q&A. CEO Jon McNeill interviewed Werner Kruck, the COO of Security First on how he’s been able to successfully innovate in an industry, that to put it mildly, is not known for innovation. Kruck showcased several different initiatives – including leveraging social media to a help manage and provide immediate response to customers, usage of Enservio predictive analytics to baseline contents underwriting, and new personalized videos that de-mystify policies for insureds. Kruck made clear that while he doesn’t set expectations, any new program has to meet customer expectations which are frequently dictated by the “Amazon experience.” Kruck also noted that Security First makes a habit of partnering with “other providers’ clouds” to better scale capacity quickly.
The always entertaining Brian Sullivan, author of The Property Insurance Report, kicked his session off with a bang noting that the single biggest challenge for the industry is the unwillingness to fail. Size doesn’t matter but mediocrity does – to survive, insurance companies can’t be mediocre, despite the fact that many mediocre carriers are in existence today. Price transparency in auto and home pricing is on the horizon Sullivan warned – and if carriers don’t have “top five pricing,” they’re out. Sullivan also talked about evolving markets that carriers have to address – the rise of Millennials and a woman-dominated economy. (Editor’s note — my favorite quote of the day was the “Men are pets” – Sullivan’s reference to how up and coming female executives view men in the changing society).
Celtics legend, Tommy Heinsohn, concluded the day with some of the secrets behind the Celtics’ long-running success. Much of it was an emphasis on conditioning (sourced from Navy drills) as well as recruiting drafts who had played on previous winning teams. Red Auerbach wanted players who knew how to win. According to Heinsohn, players were also more involved in the strategy of the game, frequently contributing suggestions in the huddle, something that is virtually unheard of today.