Innovation in Canadian Insurance: The Leadership Gap

by Michael Fitzgerald, November 4, 2014
North America

Abstract

Celent has been researching what practical steps insurance firms are taking to increase their innovation capabilities. Overwhelmingly, survey respondents reported that innovation is important or critical to achieving company strategy. However, innovation efforts are not receiving the management attention or investment required for success.

Celent defines innovation as fundamental changes to products, services, or business models that break existing tradeoffs and result in value to the customer. In the report Innovation in Canadian Insurance: The Leadership Gap, Celent extends this research by examining current efforts in innovation in Canadian insurers. The report analyzes responses to a survey of insurance professionals conducted in conjunction with Insurance Canada in the third quarter of 2014.

The objectives of the survey were to:

  1. Gauge the importance of innovation to business strategy.
  2. Identify key benefits from innovation.
  3. Detail the common barriers to implementation.

 

“Survey respondents are dissatisfied with the results of innovation efforts to date,” says Mike Fitzgerald, a senior analyst with Celent’s Insurance practice and author of the report. “Insurers need to innovate to meet consumer expectations. The data demonstrated a leadership gap in most companies which, when solved, opens opportunities for firms that invest in innovation.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Introduction

3

 

Background

3

The Business Case for Innovation

4

 

The Need for Innovation in Canadian Insurance

4

 

Characteristics of Innovation Programs

5

Competitive Analysis

9

 

Comparison with Other Industries

9

 

Comparison with Other Insurance Firms

9

Innovation Execution

11

 

Tools and Processes

11

 

Organizational Adjustments

11

 

Promoters (and Detractors) of Innovation

12

 

Results (A Report Card)

14

Moving Forward with Innovation

16

 

Breaking Through the Barriers

16

 

Recommendations

17

Conclusion

18

Appendix

19

 

Survey Demographics

19

Leveraging Celent’s Expertise

21

 

Support for Financial Institutions

21

 

Support for Vendors

21

Related Celent Research

22

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