(Mike Connor meeting with IIR at SVIA FUSION 2018—Commercial Insurance: Digital Innovation & Emerging Risks. )
The consumerization of technology has profoundly changed business in a way that has often been most keenly felt on the retail side of businesses, which in the insurance business translates to personal lines property/casualty and individual life insurance and wealth management. However, the ways people of all walks of life interact with technology influences all sorts of businesses, and behind the personal technology revolution are secular technological changes that have reshaped the way the entire world runs, and will continue to rapidly affect how businesses operate in the back office as much as the point of sale and service. The imperatives created by this changing scenario for commercial insurance and enterprise risk management (ERM) was the theme of the Silicon Valley Accelerator’s SVIA FUSION 2018 event, held March 27-29. Insurance Innovation Reporter had the opportunity to sit with Mike Connor, who co-founded the organization with Natalie Wood, who serves as Chief Operating Officer of the SVIA, to discuss the innovation imperative for commercial insurance and ERM.
“What we’re seeing is the digital transformation of enterprises taking place very rapidly, and along with that the set of emerging requirements to address the risks associated with the digital transformation of our world, our industry, our companies,” Connor comments. “It’s a matter of recognizing the limitations of legacy insurance and risk management.”
Supply Chains at Risk for Want of Tools
Many enterprises are at heightened risk because they lack the tools to deal with risks that are emerging and growing in magnitude at an accelerated speed, according to Connor. “The value chain of many companies, industries and economies are at risk because we currently lack the tools,” he says.
Natalie Wood, COO, SVIA.
One of the overarching themes of SVIA FUSION was the importance of collaboration between the parties to innovation, as fostered by organizations and platforms that help to bring them together. In the past, companies typically set aside resources to conduct market research and development to address ever-changing competition. However, the speed and magnitude of change driven by technological, political and social megatrends have rendered traditional approaches insufficient, Connor suggests. “Our belief is that no one company can solve these problems alone,” he says. “We think there’s an opportunity to bring the community together to work collaboratively to address this. We believe one of the things critical to that is developing an innovation and interoperability framework.”
In some cases that may be as simple as bringing together all the people with data sets associated with a given commercial risk, in order to make it easier to digest the related data as interoperable services, Connor says. However, the salient need is for connection and collaboration. “We’re at a place we’ve never been as an industry, but we now have tools and tech to create capability to service enterprise customers we never have before,” he elaborates. “Up till now we provided solutions piecemeal, and the onus on them was to assemble them—and the majority of those solutions were not designed for the digital world we’re in.”
The need is especially urgent because innovation in commercial has lagged relative to the rest of the industry, Connor opines. “We believe we can act as a hub to launch that innovation, and we have a lot of interest, and support in that mission, as you can see at this conference,” he says.
From Product-Centric to Platform-Centric to Solutions
Suppliers to insurance and risk management industries have traditionally taken a product-centric approach, but they need to migrate to the pattern of customer problem solving demonstrated by businesses that have taken a platform-centric approach—such as Amazon and Uber. Working from within that approach, suppliers and consortia of suppliers can develop the comprehensive solutions that companies increasingly need to solve their complex problems, according to Connor. “Most of the insurance industry is selling products not solutions, and we want to stand that on its head,” he says.
Commercial Insurance Innovators, Risk Managers Gather at SVIA Fusion Summit