An Insurer’S Innovation Appraisal Model – Processes Approach (Part Ii)

The aim of the following extended abstract is a discussion of new idea to create a model to assist evaluation of the innovation companies in the insurance sector. The problem of innovation in the field of insurance has been undertaken by the authors of TIIM forum. They pointed out various aspects of the innovation. In 2013, in the text titled Innovations in the context of the risk management (presented at previous TIIM conference) authors stressed the way of cost management of innovation in the insurance sector and have presented an original way of monitoring the effectiveness of the cost of the investment project over the entire period of the life of "the innovation effect" based on tracing the dynamics of the EVA (Economic Value Added) (2013). In 2014, in turn, is in the text titled: Insurance Products Innovations based on Management Accounting have proposed to use the concept of the learning curve-management accounting tools-in product innovation in insurance assisting. The concept could be applied in the situation when an innovative insurance entity does not have empirical observation (which may take place, for example, the offering of insurance relating to nano-production). Then, in 2015, The Authors have presented the first part devoted to the development of an Insurer's Innovation Appraisal Model – Processes Approach (2015). The main basis to take challenges that tries to develop a model, so-called InZu Model is the idea of creating a methodical approach, through which it would be possible in practice, creating a kind of ranking of insurance companies in terms of their innovation. The model created could have broad cognitive effects on the research on areas which are subject for innovative solutions and could deepen the knowledge on the competitiveness of the insurance entities. By innovation we understand here all activities implemented to processes, subprocesses and activities of the insurance undertaking, which reduce the costs of these processes by increasing their efficiency. By implementing such an innovative activities an insurer may (1) generate more cash flow, (2) optimize the premium level to the level of risk and thus implement social functions. As a starting point for the construction of the model, the Authors have adopted the process-activity approach. The construction of the model was presented at TIIM2015 in Barii. There are 10 processes and 22 actions. The processes and action were put into hierarchy and some parameters that could be used to describe the processes and activities were proposed.