The schizophrenic nature of innovation in insurance
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26 October 2015Nicolas Michellod
I have attended various conferences on innovation over the past few years. In almost all of them futurologists of all kinds and innovation experts who are invited to present tend to use the same examples, such as Uber and AirBnB, to describe how new business models can disrupt an industry. The message to insurers is strict and clear: one day the insurance industry will have its own Uber that comes in and disrupts the traditional insurance business model. They present these models as forming part of social revolution where consumers come together to demand a new style of service, based upon social equity and reinforced by free-spirited democratic principles. In some respects, they’ve taken their lead from the Internet generation of superfirms that dominate our digital lives (such as Google, Amazon, eBay, and Facebook). While I fully agree that insurers have to innovate, anticipate, and adapt to changes impacting our industry, I have to confess that I find the usual message too simplistic. What particularly strikes me is the lack of criticism towards these firms. Indeed companies have been embracing and advocating non-discriminatory values for decades in various guises (e.g., gender equality, ethnical diversity, etc.). The US has been proudly supporting these values in the global economy, and the Silicon Valley companies have been keen to promote this message. Therefore I am surprised to observe that these companies have exported their business model but neglected its social impact in new territories. The recent developments around Uber in France are a good example of this. Taxi drivers have to pay a high license authorization to be able to do their job. Many of the taxi drivers have to invest their pension to get a steering wheel. This entry tax is compulsory and supports the community, like all taxes do in every country. Don’t get me wrong, these innovative companies have brought to the market great products, services, and added value. I think they contribute to helping their industry change in a positive way. However, I think they are schizophrenic in a certain way, as they tend to forget their social egalitarian values when economic value is at stake. I am maybe naïve enough to believe that the future of our industry is not only about innovation at all costs but also about responsibility of all economic agents, including companies as well as consumers. In a world where innovation experts place schizophrenic innovators as examples, I hope consumers’ responsibility and their sense of fairness will help our industry keep a critical mind on the future of innovation and innovators. Maybe there is an innovative business model to create out of this concept?