Breaking thru Barriers (and Blizzards) for Innovation

Last week 85 benefits enrollment and technology professionals braved record levels of snow to make it to Boston, Massachusetts—not to see Tom Brady ride a Duck Boat with the Lombardi trophy, but to attend the LIMRA 2015 Enrollment Technology Seminar. 


The session opened with a metric from a recent survey of carriers and their technology partners that said 97 percent of respondents were interested in collaborating to create standard definitions of terms. A task force is scheduled to begin this week with the daunting task of normalizing definitions across an industry that historically moves at glacial speed. This task force might seem like great news, but considering that the seminar theme was “Innovate to Achieve,” this action is clearly evolutionary rather than revolutionary. Unfortunately, as Darwin pointed out, evolution that is too slow increases the risk of extinction in rapidly changing environments—a principle that applies to business as well as biology.

Benefits carriers have underinvested in core administration and enrollment technology since the 2008 economic crisis, which is especially unfortunate considering that marginal improvements in plan participation have a substantial impact on product profitability. At the LIMRA seminar, attendees expressed optimism that with the recovering economy, they can now explore the idea of technology modernization. Those who are able to establish a culture, with success measured by heads turned rather than quarterly earnings, and an infrastructure that empowers and enables innovation—with a transparent view of the customer—will be front-runners in the race to a breakthrough                                               .

In a copycat industry such as insurance, a true breakthrough will be intuitive, simple, difficult to replicate, and it will raise a host of objections from those who did not think of it first. A breakthrough, by nature, will create distance from followers.  In today’s insurance industry, a critical market differentiator that creates that distance is having a product and service platform that is designed to accelerate speed to market. Unfortunately, I’ve heard that it still takes 12 to 18 months and $1M to $3M to launch a new product. Given those numbers, consider reminding your CIO that the time has come to shed your company’s legacy platform constraints.

Rob McIsaac, principal at Novarica, moderated one of several insightful discussions at the LIMRA seminar—a session aptly titled, “Staying Connected in a Brave New World.” The moral of the conversation was that carriers who want to be able to take advantage of new opportunities need to address their core problem: their core systems. By moving their core systems past their legacy platforms to new technology, carriers would be able to quickly deliver truly breakthrough innovations, while other companies take more than a year to simply play copycat.

Someone will soon break through the innovation barrier, but how disappointing it will be to those 85 snow-battered attendees if that disruptive concept is introduced by a new entrant to the benefits community, rather than one of them. What will make the difference? Rapid adoption of new technology to accelerate speed to market without the constraints hindering insurance companies that hang onto their slow-to-adapt legacy systems.