Product innovation is defined as:
New product development describes the complete process of bringing a new product or service to market. There are two parallel paths involved in the process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis.
the development of new products, changes in design of established products, or use of new materials or components in the manufacture of established productsThus product innovation can be divided into two categories of innovation: development of new products, and improvement of existing products.
New product development describes the complete process of bringing a new product or service to market. There are two parallel paths involved in the process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis.
Improvement of existing products
This includes, but is not limited to, improvements in functional characteristics, technical abilities, or ease of use. Product innovation often takes place when a product's sales are in decline. This is an obvious and commonly used method to extend the life of a product.
nsurance
brokers, underwriters, consultants and risk technology providers
annually develop new products and solutions. In many instances –
certainly not all -- product innovation is motivated more by competitive
pressures than by client demand. That is the wrong way to approach
innovation.
The right way puts the needs of the client first, taking cues on where and what to innovate by listening to clients’ concerns and ambitions. Listen, observe closely, and anticipate more. A client-centered approach increases the likelihood that an innovation not only will solve one or more real problems but also that customers will use it and find the experience favorable, resulting in a return on the innovator’s investments.
Conversations I've had over the years confirm that carriers and brokers each do a lot to bring innovations to market, but unfortunately insurance buyers don't always appreciate or take advantage of them – a strong indicator that the innovation didn’t start with the consumer. In some cases, brokers don't do enough to champion innovative products that carriers spend time and money to create. Innovation requires investment, but it also needs to make returns.
How does a new insurance product get sold? Buyers can’t purchase it until they know about it and realize how it can help them. Underwriters need to promote the product, and brokers need to discuss it with their clients.
The consumer has an important role to play, too. Insurance buyers not only should expect their risk advisers and underwriters to innovate products and processes but also should urge them to do so. Buyers should make their needs known and share their “wish lists” when it comes to risk mitigation and risk transfer and the overall experience of purchasing coverage. Asking “Why not?” is a good way to advance the innovation process.
Ask any innovator where good ideas come from, and the answer is likely to be “everywhere.” That’s equally true in the insurance industry, but the best ideas tend to come from conversations with consumers.
Innovation must start with understanding the need or problem. That understanding comes from ordinary interactions with customers and business partners. Then the innovator must understand how existing tools and approaches might fix that problem, or why current capabilities are inadequate. Innovation can then fill the gap between the need and the lack of available solutions.
Risk mitigation and risk transfer need to innovate, for a simple reason: risk itself innovates. Survey after survey of top risks shows new and emerging risks, usually perceived with increasing impact.
For example, the World Economic Forum’s Global Risks Report 2013 explores complex external risks that go beyond organizations’ ability to manage or mitigate. These include major systemic financial failure, water supply crises and failure of climate change adaptation. By the way, these risks are not mutually exclusive; one of the realities of global risk today is how interconnected many perils are. Climate change can disrupt water supplies and wreak havoc on economies.
Opportunities for insurance industry innovation are many, but they should all begin and end with one goal: help the customer.
The right way puts the needs of the client first, taking cues on where and what to innovate by listening to clients’ concerns and ambitions. Listen, observe closely, and anticipate more. A client-centered approach increases the likelihood that an innovation not only will solve one or more real problems but also that customers will use it and find the experience favorable, resulting in a return on the innovator’s investments.
Conversations I've had over the years confirm that carriers and brokers each do a lot to bring innovations to market, but unfortunately insurance buyers don't always appreciate or take advantage of them – a strong indicator that the innovation didn’t start with the consumer. In some cases, brokers don't do enough to champion innovative products that carriers spend time and money to create. Innovation requires investment, but it also needs to make returns.
How does a new insurance product get sold? Buyers can’t purchase it until they know about it and realize how it can help them. Underwriters need to promote the product, and brokers need to discuss it with their clients.
The consumer has an important role to play, too. Insurance buyers not only should expect their risk advisers and underwriters to innovate products and processes but also should urge them to do so. Buyers should make their needs known and share their “wish lists” when it comes to risk mitigation and risk transfer and the overall experience of purchasing coverage. Asking “Why not?” is a good way to advance the innovation process.
Ask any innovator where good ideas come from, and the answer is likely to be “everywhere.” That’s equally true in the insurance industry, but the best ideas tend to come from conversations with consumers.
Innovation must start with understanding the need or problem. That understanding comes from ordinary interactions with customers and business partners. Then the innovator must understand how existing tools and approaches might fix that problem, or why current capabilities are inadequate. Innovation can then fill the gap between the need and the lack of available solutions.
Risk mitigation and risk transfer need to innovate, for a simple reason: risk itself innovates. Survey after survey of top risks shows new and emerging risks, usually perceived with increasing impact.
For example, the World Economic Forum’s Global Risks Report 2013 explores complex external risks that go beyond organizations’ ability to manage or mitigate. These include major systemic financial failure, water supply crises and failure of climate change adaptation. By the way, these risks are not mutually exclusive; one of the realities of global risk today is how interconnected many perils are. Climate change can disrupt water supplies and wreak havoc on economies.
Opportunities for insurance industry innovation are many, but they should all begin and end with one goal: help the customer.
