Innovation and an excellent product are the key to insurance competitiveness
Published: October 26, 2017
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Industry News
Brokers and insurance carriers can compete by creating the best product and getting there first. Technology advancements such as data storage, AI, and advanced telecommunications are making price competitiveness difficult, said Google Canada’s head of marketing suggested while speaking to Ontario brokers in Ottawa.
Fab Dolan, head of marketing for Google Canada, was speaking at the Insurance Brokers Association of Ontario (IBAO) annual convention. He cites Netflix and Instagram as services that innovated and transformed industries, cancelling out major companies like Blockbuster and Kodak in the process.
Despite once having 120,000 employees, Kodak missed the innovation curve. In contrast, Instagram delivered the best product that was based on new technology:
“It has been supplanted largely by apps like Instagram, which got sold for $1 billion to Facebook with just 13 employees,” said Dolan.
Blockbuster was a juggernaut with 9,000 retail location, but failed to see the advent of streaming content:
“They were able to be supplanted by Netflix – a few folks delivering DVDs in the back of a trailer across the U.S. and became a global empire,” Dolan said. “Why is it that time and time again we see this? There are common refrains.”
While these companies are not in the insurance market, there are lessons to be learned. Insurance companies must learn to be ahead of the curve if they are to compete in a changing market:
“In a world where anyone can distribute products, the best way to compete is by innovating to create the most engaging product, because it is difficult to use distribution or cost as a competitive advantage,” he told Ontario brokers.
“We have plummeting storage costs for the data… that we extract and it’s only continuing,” and as well there is an “exponential increase in our ability to compute that data,” Dolan said.
“We are starting to see a software revolution,” he added. “Airbnb, the largest hotel operator in the world, doesn’t have a single room. Uber, the largest taxi company in the world, doesn’t have any taxis. Alibaba, one of the largest retailers in the world, doesn’t have any physical stores. The list goes on and on.”