OLDWICK, N.J.--(BUSINESS WIRE)--One-year benchmarking analysis of AM Best-rated companies’ innovation assessments show that just 13% of companies earned the highest scores on their output results, illustrating that actual sustainable results over a longer period has yet to be seen in what may be the new normal business environment given the impacts of COVID-19.
In March 2020, AM Best formally integrated its criteria procedure, “Scoring and Assessing Innovation,” into its rating process, which outlines how AM Best explicitly considers an insurance company’s innovation efforts. In a new series of Best’s Special Reports, AM Best examines how insurers performed on their innovation efforts since implementation of the criteria. As the pandemic surged in the first half of 2020, AM Best observed a recalibration of priorities by innovation teams, with some insurers pausing major initiatives. At the same time, many companies achieved more in the past year than in the years leading up to 2020. Innovation strategies vary by company and business line, and insurers generally still face difficulty with regard to the linkages between innovation inputs and results, especially in times of crisis.
The individual reports are as follows:
- “Pandemic Speeds Up Pace of Insurer Innovation”: Developing an innovative culture among insurers has been an ongoing challenge, but COVID-19 upended the industry’s methodically slower pace, causing insurers to act swiftly to adapt to the rapidly changing environment. However, despite the gains in creating a more-innovative culture, most companies still score at the lower end on their innovation output scores, in large part highlighting the obstacles created by the pandemic. Report: http://www3.ambest.com/bestweek/purchase.asp?record_code=308454.
- “COVID-19 Pandemic Shifts Innovation Benchmarking Results Slightly”: Although COVID-19 forced many insurers to seek out innovative solutions, most companies still show room for improvement. The latest innovation assessment scores are slightly lower than the preliminary results released ahead of the innovation criteria in 2020, driven mainly by the challenges of the pandemic. However, one trend that has held during this period is that more-favorable innovation assessments skew toward higher-rated organizations. Report: http://www3.ambest.com/bestweek/purchase.asp?record_code=308458.
- “Reinsurance, Autos, and Health the Most Innovative Lines of Business”: The reinsurance industry has been the most innovative insurance segment, according to AM Best’s scoring. Highlighting how innovation can go beyond technology, even large reinsurers need to be nimble with regard to cycle management and use innovative strategies to be profitable in a highly competitive market. Health and automobile insurance represent the next two most innovative lines of business. Report: http://www3.ambest.com/bestweek/purchase.asp?record_code=308457.
- “Innovation in EMEA: Underlying Principles Consistent Across Markets”; “Innovation in Asia-Pacific: Varies by Market Maturity and Business Needs”: In a pair of reports, innovation efforts in the EMEA and Asia Pacific regions show that while carriers’ focuses differ by market maturity and unique characteristics, distribution is a common factor.
For an overview discussion of these reports with AM Best Associate Directors Jason Hopper and Edin Imsirovic, please go to http://www.ambest.com/v.asp?v=innovation421.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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