'Innovation in the life insurance industry,' Zia Zaman, Chief Innovation Officer, MetLife Asia

"Asian consumers are leading the way, spurring innovation that will go global. Asia is expected to account for approximately half of the insurance industry’s growth in the next decade; the Asiafication of demand means that we need to innovate in Asia, for Asia.."

The insurance industry must transform its thinking to be more innovative.

Now, you may be thinking, what does a big company like MetLife do to make itself innovative? Isn’t innovation typically the domain of startups? And innovation and insurance - surely the only thing they have in common is their position in the dictionary?

If you’re a bit skeptical about how a big company can win, I understand completely. Even though large companies have these amazing five assets of capital, brand, channels and data – assets that small companies would salivate over – they tend, unfortunately, to screw it up.

Large companies typically stumble by violating these 7 Innovation Rules:

  • They don’t focus on disruptive innovation and instead do incremental innovation. 
  • They don’t change what they reward.
  • They ask people to come up with a breakthrough on borrowed time.
  • They don’t attract new thinking or embrace a change in culture.
  • They do not put the customer at the centre of their innovation process.
  • They don’t aim big enough or give innovation efforts enough time to succeed.
  • They don’t have unwavering support from the very top.

We, at MetLife’s LumenLab, think we will succeed by getting these seven rules right.  And in our first year of operation, we have solidified our support from leadership by demonstrating a clear and rigorous test-and-learn approach to innovation that is bold and patient. We have been able to assemble a diverse team of 22+ innovators from all over the world and from outside the insurance industry. We have sequestered and dedicated resources working on disruptive ideas, in conjunction with our country teams. And we have inculcated a set of behaviours: curiosity, expansivity, experimentality, velocity, and bravery that have been applied across innovation and the business as usual.

For us in the insurance industry, we realize that our current engagement model with customers needs to change. We are putting customers at the heart of everything we do. Our customer insights and innovation methodology help provide the ideas from which we build the end solution.  As our customers and the world go digital, we are leveraging new models to improve engagement, decrease friction and increase persistency.  We’re starting with Asia because Asian consumers are leading the way, spurring innovation that will go global. Asia is expected to account for approximately half of the insurance industry’s growth in the next decade; the Asiafication of demand means that we need to innovate in Asia, for Asia. We are building new businesses, not just improving the existing core. LumenLab is here to future-proof the company, to differentiate MetLife, and to see blind spots. Disrupt or be disrupted, as Josh Linkner famously says.

In my first year looking at the insurance industry’s vulnerabilities, I have heard three myths that are often bandied about as immutable truths that we need to change. The myths are as follows: Life Insurance is sold not bought. Secondly, actuarial models are vastly superior to big data driven models. And finally that claims can only be paid after the fact.

To suggest an alternative view of the future, where these three myths are broken, consider these three predictions:

Insurance will be bought not sold. By embedding insurance into our daily lives and creating micro-moments, customer pull will be created.
Models are moving from actuarial to actuarial plus big data. New sources of data give us as the risk specialist significantly more inputs to assess risk.
Our industry will move from pooling risk to sublimating risk. We are moving from a “What If?” consumer problem to a “So How?”

Through LumenLab, we intend to pioneer new business models and approaches to rewrite the role of insurance in people’s lives and lifestyles. Digital health solutions have the greatest potential to make the most difference because people are actively seeking ways to engage in their health to improve their lives.

By teaching exploration and experimentation, remaining risk tolerant and adaptive, being a magnet for diverse talent, and developing deep consumer empathy, we are agents for cultural change within MetLife.

We are now in a new era and think a moon-shot is courageous and valuable, but not quite audacious enough. This is our bold, long-term commitment. This is our Mars-shot.

 

Hear more from Zia Zaman at the FST Media Future of Insurance Conference on November 22; click here for more details...

 

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