Why IAG has launched a new innovation incubator in Sydney
- 31 July, 2017 15:41
From left: IAG's Andrew Stead, Julie Batch and James Orchard
If there’s one thing you should know about innovation, it’s that you can’t do it alone, IAG executive GM of innovation, James Orchard, says.
The insurance giant has taken the wrappers off a new innovation incubation lab, Firemark Labs Sydney, aimed at combining external talent and knowledge with company intrapreneurs in order to produce fresh customer-oriented products and services in the insurance sector. Opening its doors officially last week, the space follows in the footsteps of IAG’s fire insuretech hub in Singapore, as well as the group’s $75 million Firemark Ventures program, which launched in 2016.
Firemark Labs Sydney is initially supporting five business innovations across early and late stage development, including external players supported by the company’s Ventures fund. The three unveiled last week are: Snug, a startup launched by serial entrepreneur, Justin Butterworth, and focused on the changing way people rent; Poncho, launched in July by internal staff and bringing together a range of insurance products in a form of ‘pick and mix’ pitched especially at millennials; and Shareover, or insurance services for the sharing economy.
Each business idea will spend 90 days in the Firemarks Lab, which can house more than 100 people. The overarching theme is tackling an artificial intelligence future, Orchard said. Consulting group, McKinsey, helped IAG set-up the processes behind the space.
At a gala event marking the Sydney launch, Orchard said IAG’s overarching ambition was open collaboration.
“What we know is there’s an overwhelmingly positive effect that an innovation focus can have on the people and culture of our organisation,” he told attendees. “We know disruption is upon us, and to remain relevant, we have to foster a culture that supports both creativity and experimentation.
“Firemark isn’t designed to be a single source or destination for innovation at IAG. This is a space where our talent can come together with external talent in a safe and inclusive environment, to challenge the status quo and norm.”
The idea was to encourage staff to be bolder, move faster and be more imaginative no matter what their role, Orchard said.
“We want them to take the learnings from here and weave that back into the everyday fabric,” he said.
The gala opening was attended by NSW Minister for Innovation and better regulation, Matt Kean, who stressed the importance of knowledge for the future state and national economy.
“Our economy is in transition, and we are on cusp of next industrial revolution,” he stated. “We can no longer rely on the commodity or mining booms for creating our jobs. What we’re going to have to rely on is the enterprise of our people. We need to rely on the ideas we generate and that’s why the commitment IAG is making into the people in the organisation, and who plays in the insurance sector, is critical not just for business success, but to the success of our state and nation.”
Minister Kean noted that in 10 years’ time, 50 per cent of jobs as we know them won’t exist. “We need the ideas not just to improve customer service within the insurance sector, but to generate jobs for tomorrow, the jobs currently being displaced because of technology,” he said.
For IAG chief customer officer, Julie Batch, genuine innovation occurs when industry, government, academia and the community come together to create together. She also suggested Australian organisations as a whole hadn’t done enough to date to foster better collaboration with universities and academia.
Alongside the innovation space, IAG has a partnership agreement for co-creation and collaboration with the University of Sydney, which will join others such as cyber security startup, UpGuard, in the lab. IAG also remains an ongoing supporter of existing startup programs such as ATP Innovations, and purchased NICTA (now Data61) data analytics startup, Ambiata, in 2015.
“Finding new ways to prevent risk and make our customer lives safer is the essence of the organisation,” Batch said during her presentation. “We’re experiencing huge disruption from technology that’s enabled by information growing at an exponential rate. We need to see disruption as an opportunity, not a threat. That’s what Firemark Labs is about.”
Firemark Labs represents the next step for IAG in delivering its customer-led business strategy and is an important pillar in the next stage of growth, Batch said.
“This is a big shift in a way of working for IAG. We’re coming from space where businesses competed, rather than collaborated,” she said.
IAG Incubation director, Andrew Stead, told CMO Firemark was set up to explore the future for insurance, how to get to the customer, and how to apply new technologies. An underlying objective is learning and changing IAG’s approach before spending too much time and resources on creating new products and services.
While there’s no set criteria for the types of ideas IAG will support through the lab, at a high level the focus is on better customer experience outcomes in areas IAG focuses on, such as the home and business, and where it’s experiencing a gap in terms of demographic penetration, he said.
IAG commenced on a restructure of its business in 2015 aimed at being more customer driven. The program of change saw the group introduce the customer labs division, now overseeing Firemark Labs Sydney.