Advice on innovation in insurance from Richard Branson
Richard Branson knows that innovation is key to survival, and has put his money where his mouth is by launching over 400 companies (so far) under the Virgin brand. Some are good (Virgin Active Gyms) some bad (Virgin Brides - did he really think that would take off?!) and some downright brilliant (who doesn’t love flying Virgin Upper Class…?) and he’s not stopping there.
We all know that the insurance market needs innovation too if it is to survive. As the soft market shows no signs of abating, investors and shareholders in both brokerages and (re)insurers are demanding innovation as a key component of growth. Risk Managers complain that this dynamism is lacking, and in a post-Brexit UK, sources suggest that 40% of premiums could be lost to local markets without innovation, threatening not just profits, but thousands of jobs.
80% of #insurance executives believe success to be closely tied to their ability to #innovate
Source: A New World of Opportunity: The Insurance Innovation Imperative by KPMG
Back to Branson
This King of innovation was recently in Sydney to celebrate “smart disruption” at the Virgin Way Co-Lab. There they created a space where last names and job titles were set aside, and together they brainstormed ways in which Virgin can continue to drive innovation and create positive change. The question of the day was:
“How do we work together to create change that adds value?”
So, how does this apply to insurance?
The market environment has changed dramatically and we need to change with it. The key is to do that in a way that adds value for everyone - clients, colleagues and shareholders. Richard shared his 6 key takeaways from his day in this article, and they are all relevant for those of us looking to innovate in insurance. In his own words (with a suggested application in insurance from me), here are Richard’s top tips:
- 1. Hone in on the problem
- 2. Surround yourself with passionate people
“Innovation flourishes best when you look to solve a problem. This has been the key to our success at Virgin. We’ve always gone into business with the aim of creating a product or service that improves people's lives.”
This means asking questions of your clients and listening - really listening - to what they say. Socratic questioning (replacing the weak and outdated “What keeps you up at night?” type approach) is a skill in which all your outward facing teams should excel. Your rewards for asking these questions will be deeper insights than your competitors, stronger relationships with clients (think “trusted advisor”) and critically, more opportunities to uncover the real problems that your clients want you to solve.
“Those passionate enough to change the world are the ones that do. Surround yourself with people who are willing to stick their necks out, seek solutions, and be the change they want to create.”
You need to up-skill your existing teams and be a magnet for passionate talent, attracting and developing stars both from within the insurance market and beyond. An inclusive culture that combines autonomy and the opportunity for professional development with a flexible and forward thinking approach – this will attract those you need most on your team.
- 3. Embrace diverse thought
- 4. Listen to everyones ideas
- 5. Simplify the idea
- 6. Say "Yes"
“It’s crucial that business leaders do not surround themselves with like-minded people, or ‘yes men’. Find people that will passionately disagree with you, and are not discouraged when things don’t go to plan or their way.”
The dangers of “group think” are well documented (not to mention the fact that they played out for all to see during the 2008 global financial meltdown). It is a leader’s responsibility to ensure that their team feels free to express their opinions, (even if they are contrary to his or her own) and it is each team member’s responsibility to speak up. Below is one of my all time favourite narratives on the topic – worth a watch if you are a leader.
“Innovation is for everyone, and often the best ideas come from those that are working on frontline, who have the most experience with the products or services – everybody should be praised for trying.”
No one knows your clients better than the people talking to them frequently. Whether that’s the account executive handling daily enquiries, the claims underwriter on site to advise during a loss, or the engineer undertaking fire protection surveys, they are perfectly positioned to listen, pick up on pain points and suggest new ways to solve them. These people need to be brilliant at asking questions and listening to the answers, and they need to feel empowered and confident when it comes to sharing their insights.
“Often people are too focused on trying to solve a huge problem or issue, and innovation gets lost along the way. Being smart is about being simple.”
Asking a team to invent a huge, complex, market-shifting innovation can be overwhelming and can cause paralysis. Valuable innovations come in all shapes and sizes, so focus on what simple small change would make a big improvement for your clients.
“Be curious, be willing, embrace risk and go for it. I’ve always been one to say,
“Yes! Now what’s the question?” ”
Lead by example. Be curious. Explore, ask questions - great questions - and be open to the answers. You never know what you might find out, where it will lead you and what you’ll innovate along the way.
