Senior leaders of insurance companies naturally expect favorable outcomes from the substantial investments they make in innovation. But are those outcomes actually occurring? And if not, why and what can be done about it?

This report illuminates—and is named after–the gap between expectations and outcomes. It does so by presenting results of a survey Celent conducted of its Executive Panel of insurance companies. The purpose of the report is not just to call attention to the problem of unmet expectations. It is also to help close the gap by offering recommendations for how to improve management of innovation.

To inform these recommendations, we asked the Executive Panel a variety of questions about how their companies manage innovation. By correlating their answers with how they reported on innovation outcomes, we can infer that certain management practices may lead to better innovation outcomes. The author augmented his analysis of survey results with his own experience innovating in the insurance industry to produce the insights and recommendations contained in this report.