I had a biopsy the other day. I went in expecting them to scrape a bit of skin off and they gave me a local anesthetic, got out a scalpel, cut out a lump and then sowed it up the hole with a few stitches.  Then they explained what happens next  - “We’ll send the sample off the to the lab, do some tests and make a diagnosis, decide on the best way to fix it and then get on with a course of treatment.” All standard medical procedure and entirely what you’d expect.

Why isn’t it standard insurance procedure? We know that the industry has plenty of issues that need fixing – better client engagement, improving claims experience, cost of fraud, designing pricing and delivering new products for the digital age (cyber and product liability for robotics) to name but a few. 

As members of Alcoholics Anonymous know to well, the first step on the road to recovery is to accept the need for treatment. There are plenty of big insurers and brokers that haven’t got that far yet.  In a rare moment of self -awareness President Donald Trump once said “I don’t like to analyse myself as I might not like what I see.”  For some incumbents looking at the businesses they have and their suitability for the digital age, it’s just better to stick your head firmly in the sand and carry on.

Encouragingly, there are more and more incumbent companies that have got beyond this stage and are identifying things they want to be better at and looking at how technology and innovation might be able to help with that.  It starts with just curiosity (hence the plethora of innovation conferences and articles like this) and from there extends to real engagement - perhaps the formation of an innovation team and/or setting aside a small budget for a bit of R&D.

Back to the biopsy, there’s much to be said for applying the same approach to insurance. Identify the parts of your business that are “unwell”, define the problem and the send it off to the world of Insurtech for some tests.  There you will find those with intimately know the relevant cutting edge technology, talent, unconstrained thinking, ambition, and a “can do” attitude. Let these guys do a biopsy, identify some remedies and suggest some possible treatments. 

Did anyone else watch Simon Reeves Big Life Fix before Christmas? If not check this out - http://www.bbc.co.uk/programmes/b084ztrw. In their own words it was about “the UK’s leading inventors creating ingenious new solutions to everyday problems and building life-changing solutions to people in desperate need”.  During the series of three programmes they make a BMX bike for a boy with no hands or feet, a camera for a boy with no hands, a computer game powered by breathe for kids with cystic fibrosis who had to clear their lungs everyday.  In each episode, the brilliance of the designs, the empathy of the designers, their absolute commitment to the cause was both inspiring and much more life enhancing than watching the Snowman or a Wonderful Life for the umpteenth time.

A key feature of each project was that all this innovation was problem led.  It started with the identification of the problem and gave the designers a clear brief that they refined through interaction with their subjects. By contrast, nearly all current InsurTech is solution led. It comes about because innovators operating in a largely parallel universe to incumbents identify opportunities and areas ripe for disruption then bring their ideas or solutions to investors and incumbents for funding and adoption.

It would great for all concerned if in 2017 InsurTech would make the transition to being predominantly problem led. Hackathons are great for this, but there is a limit to what can be achieved over a weekend. I’m looking at a similar approach, but where the innovators get a longer period to design solutions and establish their credentials working at all times on issues specifically identified by incumbents as problems they want to solve.

It would be great to see those like Corporation of Lloyd's, ACORD and the main insurance publications who currently award annual innovation prizes turn their approach on its head. Instead of awarding a prize to someone who has already built their technology, set a challenge and award the prize instead to the team that comes up with the best solution. 

In raising sponsorship for Instech London recently we have had discussions with three different large technology providers with cutting edge smart data solutions keen to lend them for free to the innovation community with a view to them being used to solve insurance industry problems collaboratively.  This would be a great development. Bringing together the innovators to work on problems identified and defined by incumbents using the best new technology on a highly subsidised basis sounds like dream territory to me. 

While innovation can do some wonderful things, there’s still no substitute for true wisdom born of experience.  There is an ancient idiom that says “a problem shared is a problem halved”. It’s a saying that’s as old as the hills, but even in the digital age it's as relevant now as it’s always been.