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Process Innovation with Disruptive Technology in Auto Insurance: Lessons Learned from a Smartphone-Based Insurance Telematics Initiative

In: BPM - Driving Innovation in a Digital World

Author

Listed:
  • Jens Ohlsson

    (Stockholm University)

  • Peter Händel

    (KTH Royal Institute of Technology)

  • Shengnan Han

    (Stockholm University)

  • Richard Welch

    (Concord Group Insurance)

Abstract

Insurance telematics or usage-based insurance (UBI) is a potential game-changer for the insurance industry, especially for innovating auto-insurance. In order to achieve and sustain UBI for auto insurance, insurers are called upon to innovate the marketing and sales processes of the UBI product, as well as related processes such as risk assessment and price calculation. In this chapter, we demonstrate the insurer’s process innovation with smartphone-based insurance telematics, using the example of the “If SafeDrive” campaign which was commercially conducted by the insurer If P & C in Sweden. The results show that although disruptive technology can trigger process innovation, such innovation cannot succeed and be sustained without fundamental changes in a company’s structure, business model and business strategy. We further propose a capability layer model for understanding the insurer’s process innovation behaviour. This chapter provokes the critical thinking with regard to the exploration and exploitation of disruptive technology into process innovation. Further, the chapter contributes new knowledge to the research of process innovation with disruptive digital technologies.

Suggested Citation

  • Jens Ohlsson & Peter Händel & Shengnan Han & Richard Welch, 2015. "Process Innovation with Disruptive Technology in Auto Insurance: Lessons Learned from a Smartphone-Based Insurance Telematics Initiative," Management for Professionals, in: Jan vom Brocke & Theresa Schmiedel (ed.), BPM - Driving Innovation in a Digital World, edition 127, pages 85-101, Springer.
  • Handle: RePEc:spr:mgmchp:978-3-319-14430-6_7
    DOI: 10.1007/978-3-319-14430-6_7
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    Cited by:

    1. Sebastian Derikx & Mark de Reuver & Maarten Kroesen, 2016. "Can privacy concerns for insurance of connected cars be compensated?," Electronic Markets, Springer;IIM University of St. Gallen, vol. 26(1), pages 73-81, February.

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