FOMO-driven innovation: How 'fear of missing out' is pushing insurers to act

FOMO-driven innovation: How ‘fear of missing out’ is pushing insurers to act | Insurance Business America

Insurance News

FOMO-driven innovation: How ‘fear of missing out’ is pushing insurers to act

Rob Galbraith, founder and CEO of Forestview Insights, on the need for transparency in market

Insurance News

By
Chris Davis

Rob Galbraith, founder and CEO of Forestview Insights, has spent years working closely with insurance companies, challenging their status quo, and guiding them toward innovation. During this time, he has noticed the deeply ingrained nature of insurance institutions, which have enjoyed decades of relative stability, untouched by the kind of disruptive forces that other industries, like the media or technology, have faced.

“You don’t have that kind of Netflix-type startup that comes in and over a decade kind of becomes the market leader while everybody else tries to catch up,” Galbraith says.

This stability has made the insurance industry uniquely resistant to rapid transformation. As a result, organizations often struggle to adapt to the new realities of a fast-evolving business landscape.

“Because you have such stability, you have ingrained processes, ingrained organization,” he says, underscoring the difficulty of fostering a culture of change.

A key issue in driving change within insurance companies, Galbraith explained, is that until there’s a clear and imminent threat, “it is very difficult for organizations to move quickly.” Innovation requires not just new ideas, but an organization-wide shift in mindset, something that large, well-established insurance firms have trouble embracing.

Yet, over the past five years, there has been a noticeable shift. “There’s a lot more transparency, quite frankly, in the insurance market than there was before,” he said.

Companies are beginning to open up about how they innovate and the areas they’re focusing on.

“We see this at the plethora of conferences that have grown up,” Galbraith says.

FOMO-driven innovation

One of the catalysts for this shift, according to Galbraith, is the rise of insuretechs and outside pressures. He tells IB that “both vendors and consultancies, benchmarking organizations, rating agencies and regulators have started to include innovation as a criterion in their evaluations of insurance companies. This external push has created what he described as a bit of “FOMO” within the industry, spurring companies to act even if they don’t fully understand the direction they need to go.

Galbraith’s role has increasingly involved educating these companies on innovation as a discipline.

“What I come in to preach is really the idea that innovation is a discipline no different than claims, no different than underwriting, no different than actuarial science,” he says.

Unlike underwriting or claims, which have well-established best practices and professional designations, the innovation space is still relatively uncharted.

“It’s kind of the wild, wild west,” Galbraith says. The discipline of innovation, he explained, is still in its infancy in many insurance firms. “There hasn’t been a lot of best practices, and those are just starting to build up now.”

‘It’s that muddy middle that a lot of organizations don’t really understand’

As companies grapple with the evolving landscape, Galbraith emphasizes the need to shift away from the piecemeal approach many have traditionally taken.

“In the past, I’ve seen pet projects where the chief claims officer has some projects, the chief underwriting officer has theirs, and these innovation efforts may not tie back to the strategic objectives,” he says.

“We think of innovation simply as the ideation phase,” he says, but the real challenge lies in what he calls “the muddy middle” — the often overlooked steps between coming up with an idea and actually implementing it.

“It’s that muddy middle that a lot of organizations don’t really understand.” The importance of having a clear process for innovation cannot be overstated, according to Galbraith.

“How do you go from ideation to implementation? What is your process?” These are the questions he encourages companies to ask themselves. In his experience, it’s not the lack of good ideas that holds companies back, but their inability to manage the process effectively.

“How do you decide which ideas to pursue, and how do you quantify and evaluate as you move through the process?” he says.

Another critical challenge is knowing when to pull the plug on projects that aren’t working.

“You need to be able to end projects midstream and pursue others that are more fruitful,” Galbraith says. Without this ability, companies risk getting bogged down in initiatives that ultimately don’t deliver the desired results.