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Innovation is a continuous process that has led us to today’s digital age. New technologies, and first and foremost the smartphone, have fundamentally changed our behavior and the way we live, consume information, shop and communicate. Technology has created massive opportunities for companies that know how to utilize them in order to offer better and cheaper services paired with convenience. The rise of companies like Uber, Airbnb, Netflix, WeChat. Insurance, however, is lagging behind in the tech curve and the industry as a whole is struggling to innovate.

At the 4th Asia Insurance Review Big Data Summit in Singapore, my live poll revealed the biggest challenges when adopting Big Data. 33% percent of participants identified a lack of Vision and Strategy as the number one challenge closely followed by Culture and Mindset with 28%. The conference was attended by over 100 delegates from insurers across Asia and the results suggest that insurers are still at the very beginning of their big data journey and most likely at the beginning of any new technology adoption including artificial intelligence, internet of things and blockchain. While technology is not the solution to every problem the insurance industry is facing, it is definitely an enabler for innovative products and services as well as operational excellence.

Lack of Digital Talents

The root cause for the lack of an innovation strategy is often that insurers don’t have the internal resources, skill sets and experience to develop visionary ideas for the digital age. Their staff is well equipped when it comes to running and maintaining the core business but lack experience in developing digital propositions. One of the reasons for the lack of digital talents could be the low percentage of millennials and digital natives working for insurers. In the US, the median age for insurance carriers is 44.5 while Google’s employee median age is 29.

But most insurers are struggling to attract digital talents and millennials. One of the reasons is undeniable the corporate culture of many insurers which is very conservative and hierarchical with a mindset that doesn’t embrace innovation and is reluctant to change. This clashes widely with the expectations of those talents. The majority of millennials and digital talents are not interested in working in a traditional corporate culture. They cannot thrive in an environment that consists of slow decision making, inflexible processes, strong hierarchies and an unwillingness to change or disrupt the status quo. In general, an environment like this makes it extremely difficult or even impossible to develop and execute digital strategies, to change and adopt new technologies, and develop disruptive business models at speed.

What can insurers do to overcome those internal challenges in order to quickly catch up in the innovation game? Changing a deep-rooted culture is a long process and, as it turns out, injecting digital talents from the millennium generation might not be as easy as well. Insurers have to rethink their human resource strategy as well as their structure and innovation approach. Not only customer behavior is changing but also the way we work. Millennials have no interest in working for the same corporation their entire life but rather work on projects and ventures that interests them, gigs that excite them and where they can apply their skills while acquiring new ones. Thus, insurers have to adopt new ways to initiate and run innovation projects outside the unfavorable corporate culture and create an environment where ideas can blossom, and change is embraced.

Venture Building

One solution is leveraging venture building. Venture building tools are a great way for insurers to initiate innovation projects, attract new talents and even change the internal corporate culture and structure in the process. The entrepreneurialism and the pioneering spirit that prevails in young technology firms and among millennials working for startups helps to stimulate a unique innovation culture and to incorporate external intelligence.

The most innovative global insurance players have already realized the potential. AXA has founded Kamet in early 2016 with an initial investment of €100m for the first five years and offices in Paris, London and Tel Aviv. Their goal is to build companies from the ground up, from ideation to scale.But how can smaller insurers start on a local level? Here is an example of how a local project could be started together with a venture building partner:

Stage one: Strategy Bootcamp

A group of internal innovation enthusiast from the corporate are teamed up with a group of venture builders, entrepreneurs, digital and tech talents. Together they analyze pain points of the incumbent and identify possible solutions. Because the key to innovation is not to find the latest technology and adopt it but to identify problems and the right (tech) solution to solve it.

The benefits of the strategy bootcamp are that

1.    the project is taken out of the toxic environment of the incumbent,

2.    digital talents and entrepreneurs can be attracted more easily, and 

3.    internal staff is exposed to startup work mentality.

The goal of the strategy bootcamp is to develop possible venture ideas that have been designed together with digital talents and entrepreneurs and verified by internal staff. As a byproduct, internal staff will get to experience an agile work environment and innovative methods like design thinking enlarging their work experience which will ideally be adopted back into the internal organization and help change the corporate culture over time.

Stage 2: Startup-as-a-service

This stage starts when the strategy bootcamp has produced a venture idea that was approved by management to be realized. The venture could be a new product or service, a new sales channel, a mobile app development or a technology that should be adopted. The venture runs outside of the corporate environment with its own budget and possibly even own legal structure.

The benefits of building the venture outside the corporate structure are the

1.    access to entrepreneurs and digital talents,

2.    realizing the venture at startup pace,

3.    increasing speed to market, and

4.    at considerably lower costs.

At the same time, internal staff is taking part in the venture building and will be trained on the job along the way. That way insurers develop their own people while having access to technology and digital talents.


Venture Building is a hybrid model in which innovation is accelerated by the combination of the best features of the corporate and the start-up world, aiming to provide new solutions to complex problems insurers are facing. It is an accelerated approach promoting inside-out and outside-in innovation in order to overcome challenges resulting from corporate culture, mindset and lack of skills, knowledge and talents. With the right setup it can be leveraged even by local and small players and not only major multinational corporations.

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