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Obstacles to Innovation at ISO

The Insurance Services Office (ISO) has a rich history as a trusted source of information and analytical support for the P/C insurance industry. Since its transformation from a nonprofit to a for-profit organization, ISO faces significant obstacles in fostering innovation, such as complacency and a strong decentralized structure. This proposal outlines actionable steps to revitalize the idea-capturing process, promote innovation training, and align resources to support a culture of innovation, all aimed at enhancing ISO's ability to create value in the dynamic insurance landscape.

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Obstacles to Innovation at ISO

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  1. Obstacles to Innovation at ISO

  2. What is Insurance Services Office (ISO)? • Premier provider of data, analyticaland decision support products • Serves customers in and outsidethe insurance industry • Trusted intermediary to the P/C industry • Leading source of information about property and liability risk

  3. ISO History and Structure • In 1971, ISO, a nonprofit organization owned by the larger companies in the industry, was formed replacing a number of state insurance bureaus. • In 1996, ISO became for-profit which enabled it to perform as an independent company focused on providing value to the insurance industry. • Structure • 4 independent Strategic Business Units (SBUs) • Large somewhat federated IS&T organization • Shared Marketing/HR/etc • Many recently acquired independent subsidiaries

  4. Examples of Innovation at ISO • ISO Score Small Business • ISO Score Small Business is an automated, intelligent, and low-cost system for scoring small commercial risks (Like a credit score but for insurance) • Workers Comp FROI/SROI Transactional (FST) • Each state requires submission of Workers Comp claim info in slightly different formats • FST allows insurers to submit data to the ISO transactional system and ISO satisfies each states reporting requirements obviating the insurer of this expensive task

  5. Innovation at ISO • The creation of value through the implementation of new ideas • Innovation is composed of: • Conception and refinement of new value-adding idea • Little understood • No processes in place – Lightning bolt we hope occurs • Huge room for improvement • Implementation: Advancement of new idea from concept to utilization • Well understood • Many repeatable processes in place (ex. BCP to SMC) • Incremental improvements are possible

  6. General Obstacles • Strong past performance • High market share • Results in complacency • Non profit history • Strongly decentralized org structure • Different SBU’s are not inclined to work together • No dedicated resources for innovation • Stricter controls

  7. Actionable Obstacles • ISO does not have enough individuals purpose-fully searching for and defining opportunities • The idea-capturing process at ISO has fallen into disuse and needs renovation • The full potential of the CRM Process as a valuable resource in the search for and development of new opportunities is not being realized • Job rotation is not being purposefully used as a means of fostering innovation • We do not do enough training in support of innovation • The rewards system at ISO could be used more effectively to support innovation

  8. Innovation Proposal – July 05 • Authorization to refine and begin progressing the general recommendations • Dedicate Individuals to Innovation • Renovate and re-introduce process for idea capture • Train in Innovative Methodologies • Passively Screen New Hires • Formally Rotate Jobs • Enhance and Leverage CRM • Create Incentive Programs

  9. Recommended Next Steps • Better determine ISO’s current Innovative status • Conduct Stevens Innovation Audit • Research origins of recent new products • Determine barriers to implementing an innovative ISO • Refine recommendations based on findings • Publicize initiative among employees (and update status periodically) • Align with other initiatives to create a stronger case for change toward an innovative culture • Implement recommendations

  10. Update • ISO’s 2009 strategic objective is in pursuit of growth, large portion tied to improving innovation • ISO does not have enough individuals purpose-fully searching for and defining opportunities • Developing white space opportunity attack teams • Developing common processes/deliverables managing innovation within SBUs • The idea-capturing process at ISO has fallen into disuse and needs renovation • Different SBUs are developing their own basic idea-capturing tools • The full potential of the CRM Process as a valuable resource in the search for and development of new opportunities is not being realized • No change • Job rotation is not being purposefully used as a means of fostering innovation • No change • We do not do enough training in support of innovation • Working on developing grassroots education in basics of Innovation • Followed by more focused training and attempt at culture change • The rewards system at ISO could be used more effectively to support innovation • No change

  11. Comments

  12. End of Slides

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