Innovation within the insurance industry is a hot topic right now; and with it, the concept of Greenfield innovation. For the UK, the Greenfield approach may be seen as quite the risk. However, to keep up with the competition, insurers must think outside of their existing architecture and see where the opportunities lay. Understandably, a lot of consideration needs to be undertaken when exploring Greenfield innovation. Where do you start? How much will it cost? What are the risks? How much governance needs to be considered?

Despite all of these questions, there are significant benefits for insurers who go the way of Greenfield. Let’s break it down into the beginnings of a business case.

Speed to market

Innovation (in the context of beating the competition), is all about speed to market. A timely release to market can make or break how innovative your product is. Greenfield allows for speedy innovation. Due to the ‘blank slate’ nature of Greenfield, there are fewer technological blockers to interrupt development. Enhancing customer experience with methods such as contactless claims and mobile-enhanced services, insurers want the ability to implement these changes to keep up with the market. It’s not just about the product release itself either. Greenfield will allow insurers to push out updates and further enhancements to these products. This way, the product is continually developed and can maintain its innovative edge.

The ability to scale

As mentioned previously, it’s one thing to bring a fantastic new product to market. It’s another to have the ability to scale it accordingly to the demands of the said market. Insurers should be continuously learning about their customer base to provide the best service. With the greenfield approach, their products can be moulded to suit both the customer and the internal architecture.

The risks with keeping legacy systems are increasing

One of the biggest drivers for change within insurance is the need to get away from old ways of thinking. Similarly, legacy systems are becoming less fit for purpose as time goes on. Risks, when they break, are increasing – outages and data concerns are becoming more and more of a problem. Additionally, the talent required to maintain these systems is becoming more challenging to acquire. Greenfield does indeed have its own challenges regarding testing and updates; however, there’s an argument to say that there is less risk when issues occur.

It’s not just about the technology

Greenfield is certainly a technological approach; however – the focus should be where the benefits are; which is the end result for your customers. For insurers who wish to productise their offering and pitch a more niche and personal approach, greenfield’s innovative principles can allow for this. Greenfield is there to support a platform that benefits your targets and vision in a flexible and scalable way.

Strategise like never before

With so many factors in the insurance market outside of insurers’ control, it’s useful to be able to adapt the product offering easily. An effective product/policy strategy can allow for insurers not only to keep up but stay ahead too. To stay ahead of the competition, strategising the roadmap for where greenfield will benefit the business is hugely important.  For insurers who are attached to legacy systems, a big part of the strategy will be about coming away from that and starting fresh. However, moving forward, the greenfield approach can fit into a larger business strategy rather than a strategy forcibly being formed around it. Eventually, greenfield will become a large part of your Target Operating Model.

Needless to say, greenfield isn’t right for everyone. Many considerations need to be taken into account – and starting afresh might present more problems than solutions (particularly early on). It might be that merging a greenfield approach as part of a larger digital; transformation among legacy systems is the best compromise.