Innovating successfully in insurance requires acceptance that, generally, insurance should be seen as a ‘need’ and not a ‘want’, says George Beattie, Head of Innovation, CFC

Innovation is the key to success in our industry, right? Correct. But only if it makes sense for what consumers actually need. New ideas and capitalising on the evolution of technology must be treated with caution.

Root sat down with George Beattie, Head of Innovation at CFC - a specialist insurance provider, pioneer in emerging risk and market leader in cyber - to get his thoughts on innovation in our industry, and why some businesses might be doing it wrong.

Is it fair to say the insurance market is slow at innovation?

The insurance market has always had a difficult relationship with innovation. We’ve become good at incremental change to existing products – and this is important work, but consequently we have been underdelivering in the context of breakthrough innovation. By this, I mean products that don’t yet exist. We know that the insurance industry is catering for an ever-lower proportion of economic activity.

To arrest this declining relevance, we need to look at new risks and design products to help mitigate them. Insurance companies need to have the infrastructure, talent, leadership, and investment to deliver breakthrough innovation. It’s not something that can be done properly on a part time basis.

Why does CFC think they are different?

CFC has a standalone innovation team with the skills, technology, leadership buy-in and underwriting capital to deliver new products without drawing on assets within the main business any more than is completely necessary. This means we can move faster in the pursuit of new solutions. The broader company is very innovative both practically and culturally, with all our business traded digitally including via API’s with our distribution partners.

Can the insurance market be accused of hunting innovation headlines rather than performance?

It’s really tempting to go for headlines rather than concentrating on fundamentals. I think there’s some evidence of that in the market. We tend to prefer to work quietly on things that are going to make a real difference. It’s harder to do this, because for many innovation teams there’s a feeling of pressure to show results. However, by concentrating on propositions that are going to sell and make money, the end-state is much better if those priorities are in the right order.

How to differentiate between good and great innovations?

This is ultimately the thing that keeps me up at night. It’s easy to spot bad ideas. Like in the VC world, bad ideas are the ones that exhibit unrealistic expectations about traction, or just wider product/market fit. As insurance people, we are prone to missing a key question which is: just because we can, does it mean we should? Just because there is some exciting data, or a way to use a new type of technology, it doesn’t mean anything if it doesn’t make things better for your target market. Great ideas are ones that have exceptional product/market fit. They are ideas that facilitate activity rather than being seen as a tax. Ideally, they excite people because they have some kind of ulterior benefit to solely providing insurance coverage.

An example of this is the insurance product from Gaia, which I was lucky enough to help them put together in a prior role. Gaia offers IVF insurance – which means that if your IVF process fails, the insurance refunds your treatment fees. In addition to peace of mind, Gaia offers consultancy around the best clinics to get treatment, and counselling if something goes wrong. What’s great about this concept is that people aren’t going to Gaia because of the insurance - they are going to Gaia because they want a family.

Great ideas are exceptionally hard to find - but they do exist.

Do insurance customers care about innovation?

Innovating successfully in insurance requires acceptance of a significant truth: generally, insurance should be seen as a ‘need’ and not a ‘want’. We aren’t in the business of selling a new phone, or a new line of trainers. These are things people want. We are in the business of selling a product that people need, and our job is to get them to recognise that need and to believe in the value of the product we are offering to solve their problem.

When one acknowledges this, our search for ‘great’ ideas is easier to direct. Customers care about innovation in so far as we can answer their needs. Few innovative products succeed to scale where lots of education on the risk issue is needed- so finding risk issues that customers really care about from the start is a critical bedrock to making innovation happen that customers care about.

To find out more about CFC, head to their website: