Mark Galante of PURE: “Sometimes innovation doesn’t require reconstructing from scratch but rather allowing consumers a greater ability to tailor.”

Mark-Galante-HeadshotChief Marketing Officer of the PURE Group of Insurance Companies, Mark Galante has 18 years of experience working for the nation’s top-rated carriers. He spent nearly six years as a Vice President for personal lines marketing & distribution at The Hanover Insurance Group and before that, he worked in a variety of roles at Chubb Personal Insurance. He earned his MBA degree from New York University’s Leonard N. Stern School of Business.

Privilege Underwriters Reciprocal Exchange (PURE) is a policyholder-owned insurer dedicated to creating an exceptional experience for high net worth individuals and families. PURE provides customizable coverage for high-value homes, automobiles, jewelry, art, personal liability, watercraft and flood. For more information visit pureinsurance.com

“Innovations in Insurance” is a Q&A Enservio blog that interviews thought leaders working to improve the quality of work while managing change within their organizations.

Can you cite a good example of innovation in our industry with respect to property?

There are lots of good sources of innovation in insurance, but let me focus on three areas: One is helping insurers to assess risk. Another is helping to prevent loss, which obviously benefits insurers and policyholders, who we call members. The third is providing new coverage that better addresses evolving risk.

In helping insurers assess risk, PURE is among a number of insurers looking at ways to safely and compliantly use drones to inspect roofs or help us access challenging areas. Drones could be highly valuable prior to underwriting the risk in a hail prone area or following a major catastrophe.

With regards to preventing loss, we’re inspired by the possibilities found in smart home / smart system technologies such as Google’s Nest. As the popularity of these offerings increases, there are more and more people that are not only controlling their lights and thermostats from a smartphones or other devices, but many of these people are also viewing live feeds from in-house cameras or receiving alerts when something bad happens, like excess water flow or a drop in temperature. Various insurers are looking at these technologies and the companies that offer them as ways to enhance their underwriting, reduce risk, and improve the policyholder experience.

Innovations that pertain to preventing loss can also be more human in nature. At PURE, we created a role called the Member Advocate with the express purpose of making life easier for our members with regards to risk management and claims. Member Advocates are tasked with studying major losses after they happen to identify what can be done to prevent that loss from re-occurring. PURE’s homeowners policy includes a loss mitigation benefit that affords members up to $2,500 towards the installation of a device or solution designed to prevent that loss from happening again. Our Member Advocates guide members in determining the best way to spend that money. Over the years, we’ve helped to fund lots of things like permanently installed generators, water shutoff devices, lighting suppression systems and more.

Thirdly, insurers have been trying to introduce better coverage features that consumers find valuable. We have all seen coverage features that have higher perceived value than real benefit for the policyholder. Our view is you shouldn’t invest in any product innovations unless it’s going to create a real tangible value for the member.

For example, we looked at the fact that only about 10 percent of Californians purchase earthquake insurance. A major contributor? The fact that it is essentially an all or nothing decision: consumers either buy full coverage with very limited deductible options and limited ability to control their coverage and premiums, or they buy nothing. Most decide to opt out and take on all of the risk. We recognized that people want a greater ability to tailor. So we came out with an agreed value offering that allows our members to choose the coverage limit that makes sense for them, and give them the additional flexibility of more deductibles and coverage options. That’s an example of innovation where it’s really more about responding to the consumer’s need, less about trying to come up with a buzz worthy coverage feature.

What does “to innovate” mean to you? What jumps out?

Innovation is a change for the better and one that creates tangible value. In the business world, that tangible value is tangible economic value. Tangible economic value could be created in a variety of different ways. It could be created through better risk selection, through better loss prevention, through better coverage that means real economic value for a policyholder. It could result in a better service experience, whether for the agent in the form of ease of doing business or for the policyholder in their entire journey with the company. Ultimately it comes down to innovation being a change for the better.

Where do you see the future of innovation going?

I think data is going to be playing a big role. The field of predictive analytics in general is going to continue to evolve. There’s going to be more data attributes for more sources that will enable insurers and other disciplines in this industry to sharpen pricing, to sharpen underwriting, loss prevention, etc.

We conducted a survey that showed CEOs rank personal privacy and personal data security as their highest risk concern; much higher in their eyes than a threat of a lawsuit or threat of physical damage to their property or even a threat to their family security. It’s also a category of risk that they feel least mitigated against. Insurers will tackle new ways to address these evolving data risks.

What should companies do to cultivate a culture of innovation?

Number one, it starts by encouraging your employees to identify and promote new solutions and that includes the ones that require you to take risks. We came up with a core values document called the PURE Principles. In it, we encourage our team members to take risks when they believe doing so will create something better. We encourage people to be creative and to raise their hand if they think that there’s a better, smarter way of doing something. Another idea is to look at cross functional or multidiscipline problem solving. The innovation expert Stephen Shapiro said, “Expertise is the enemy of creativity and innovation.” Certainly “experience” can be an inhibitor of creativity and innovation, because we’re programmed to produce familiar trusted responses. In Houston there’s a group of cardiologists that meets with gas pipeline experts to create innovations that are relevant to each other. Both groups are trying to move fluid through pipes; completely different disciplines yet the challenges are similar.

Lastly, when innovations do occur celebrate them inside your organization. We hold monthly town hall meetings where we talk about employees that have helped us do things better. We present awards that recognize people for innovations or other exceptional achievements. Make sure that you celebrate innovations because whenever you do that it encourages more people to create their own.

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