The P(eople) factor: being Insurtech in 2021 - InsuranceUp

The P(eople) factor: being Insurtech in 2021

Limiting the debate to technological issues could be a serious mistake, because the human factor will be decisive in the process of digital transformation of both the country and the companies: the skills of people inside the organizations and the integration with those outside, namely the customers.

10 Mar 2021

2021 will be a decisive year for Italy, for its companies, for all of us. We have to win the struggle against Covid-19, we have to react to a systemic crisis as we have never experienced since the end of the Second World War, and we have to seize the opportunities that will come out of this with the European Recovery Plan, which would be better from now on to call by its real name: Next Generation EU.

The real, hard work of building the future, of thinking about the next generation of businesses and customers, now gets underway. Digitalization and sustainability can no longer be just ingredients of strategic visions but rather operational priorities to be vigorously and decisively pursued. There will be no lack of resources, both public and private, but plans, projects and effective organizational models are needed. This applies both at government level, despite the unsatisfactory level of the current political debate, and at the level of each company and its ecosystems. Focusing only on technological issues could be a serious mistake, as the P(eople) factor will be crucial in this transition process: from schools to in-company training.

Italy is lagging behind in the digital transformation process, but it is not standing still. Just like the insurance industry, which is certainly not starting from scratch yet must change its pace to keep competitiveness, market shares and margins. 2020 has widened the gap between the supply of digital services and demand, a slippery slope that must be healed quickly to prevent new players from creeping in. There would be little to worry about if they were just startups and scaleups. Lurking, ready to spring, are the Digital Giants, mainly from the United States but not only, who do not have a certain insurance culture but technologies, data and the ability to combine them in order to reach the market with aggressive, simple and, above all, convenient proposals.

Italy is a country of great traditions. History reminds us that the first known insurance contract was stipulated in Genoa in 1189. But tradition is no longer sufficient and can even become a handicap if it is not reinforced with visions and actions capable of understanding change, a boulder that holds back companies and hinders transformation and growth.

What is the Italian insurance industry lacking to be an insurtech? Know-how, tradition and customer trust, even when reputation is not at its best. And awareness of its own limits is also required, and this is no small thing, as a survey conducted by the Italian Insurtech Association with EY reveals.

Even if only 1 company out of 3 has a Chief Innovation Officer, the majority considers the diffusion of an innovative mindset within the organization a priority. In the majority of cases, open innovation prevails over internal innovation, but when asked what the priorities are to encourage innovation, the first two answers are: training and new skills development.

To become insurtech, therefore, insurance companies need first of all “startuppers in the company”, to use the title of Roberto Battaglia’s book, just published by Egea, which develops this theory: you can become entrepreneurs within an organization. How? The basic principles are: companies that make available “freedom to express oneself” for more than a short time, and people ready to occupy them with courage. For the mixture to work, however, there must be a few clear mechanisms for using such spaces and a toolbox for transforming problems and challenges into effective solutions.

The mindset for innovation, therefore, is not only built by activating and spreading technological skills but also by initiating a cultural change capable of making technologies productive for business. Working on the P(eople) factor. Battaglia teasingly writes: “To go in this direction, it is necessary to live more with those in the company who deal with external customers, to think like them and, above all, to enter their area of action to the point of almost becoming an integral part of it”.

A genuine cultural revolution needs to be carried out in businesses, and therefore in insurance companies, in order to reach the other side of the human factor. On the one hand, there is the “re-evaluation”, the reskilling, of the personnel within the company and the recruitment of new talents with innovative profiles; on the other hand, there is the attention, almost a symbiosis, with those outside the company, the customers. It is no coincidence that the customer-oriented approach is one of the drivers of innovation identified by the Italian Insurtech Association and one of the mantras of any digital transformation project..

Creating such a symmetry for insurance companies means shifting from the concept of the product to that of the service and, indeed, rethinking organizational and business models, relations with the supply chain, and opening up to new ecosystems. Startups and scalups can be sources of inspiration and stimulus, but the capital to be enhanced is already inside the companies, in their history, in their portfolios. It must be reinvested with strategies suitable for market changes and with the awareness that in business companies are no longer alone. The real surprise, in the end, will be realizing that being insurtech means paying more attention to people and their needs, in and out of companies.

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