Innovation: Industry Serves Itself Before Serving Customers

In their quest for survival, carriers and brokers develop products and services to help themselves.

By CYRIL TUOHY, managing editor of Risk & Insurance®

One way for the insurance markets--indeed every market--to advance is to innovate.

Counterpoint: Insurance Remains an Innovation Laggard (09/15/12)
Point: Insurance and Risk Professionals Must Innovate (09/15/12)
Fueling Innovation (02/19/13)
Diving Deep (12/18/12)
A Range of Innovation Talent (09/15/12)

Whether we're talking about the development of new coverage programs new software applications, or new ways to communicate with customers through blogs, podcasts and webinars, innovations are first and foremost--so we're told--designed to serve the end user.

While that's true--mostly--it's not the whole story.

Blogs, podcasts, webinars, roundtable discussions, are good for clients, to be sure, but they are even better for the sponsoring carrier.

These tools allow a carrier to brand itself in the marketplace, to promote its products and services, and to perpetuate its view of the state of the industry.

Insurance carriers, industry vendors and professional services firms serving insurance and risk management have one responsibility above all: to ensure their own survival.

With one push of a button, a carrier can send out a flier or an advisory about a new coverage product. A carrier doesn't have to pay for printing costs or mailing the announcement using the postal service.

What financial risk is there in sending web-based newsletters to clients, or sponsoring webinars through a third-party provider like Webex? Very little.

And the reward is high if 1,000 clients decide to join a webinar or participate in a carrier-sponsored homepage on one of the popular social networking sites.

A more knowledgeable client is good but it's good for the carrier first, the client second.

If 10 risk managers respond to an insurance carrier circular blasting out to 60,000 customers, and one of those 10 covert from prospect into client for an insurance product or service, the carrier's already ahead of the game; never mind the other 59,990 customers who deleted the message unopened.

Carriers need to keep up with the competition. If carrier "A" finds a multi-channel approach to reaching customers, it's not long before competing carriers jump in too.

In the end, competitors are the ones who are most interested in using the latest technological innovations, and it's the insiders who grasp the nuances of one product or feature, or one channel or another.

That's not necessarily a bad thing.

(Click here to read the Point "Innovation: Industry Serves Customers First, Then Itself.")

September 15, 2010

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