A Research On Insurance Companies' Innovation Capability

Topics about innovation have been heatedly discussed in insurance industry recently, and innovation contributes much to growth of insurance industry. For instances, bankassurance and investment-linked policies are typical insurance innovations. However, some existing phenomenon, such as more-than-90% similarity rate of insurance policies, high operation expenses of insurance companies and lack of non-profits policies, show that innovation doesn't play perfect roles due to some constraints. Through research, this thesis assumes that the basic reason resulting in poor performances of innovation lies in insurance companies' lack of innovation capability, and argues that research on problem of insurance companies' innovation capability has priority among all the research about insurance innovation at present.This research has important theoretical and practical significance. Theoretically, research on problems of insurance companies' innovation capability adds contents to insurance microtheory studies, and deepen research on insurance innovation as well; practically, research on problems of insurance companies' innovation capability is helpful for insurance companies to strengthen innovation capability, produce continuous innovations and keep competence advantage, innovation capability is also the pillar strength for insurance industry to evolve through development periods, adapt to international competition and satisfy demands derived from the development of society and economy.Aside from preface and conclusion, this thesis is composed of eight chapters.As research in chapter 1 shows, insurance companies' innovation capability, which exists inside the organization, is a kind of capability in favor of innovation. Innovation capability is the foundation and fountain of sustainable competence advantage. Insurance companies' innovation capability, which contains six factors, i.e. company leadership, company culture, organization structure and process, information technologies, client strategies, and performance evaluation, is a system, and the six factors promote and constrain each other during forming innovation capability. Macroenvironments of insurance companies can constrain or promote insurance companies' innovation capability as well.Chapter 2 to chapter 7 study the operating mechanism, effects and ways ofstrengthening of the six factors respectively, this part is the main body of the whole thesis. Research results are as follows.Company leadership is one of the most important factors for innovation capability due to its power of controlling and affecting the insurance companies' activities of operation and innovation. The function of leadership, which takes innovation as the core content, is just like the one described by Schumpeter for entrepreneurs. There are two ways for insurance companies' leadership to affect innovation. First, company leaders take advantage of their own power and capability to carry through innovation projects. Second, companies set up a leadership mode of freedom-concentration-style to evoke the activities and creativities of employees.Insurance companies' culture is the most important component of insurance companies' innovation capability. Insurance companies' culture is a kind of control mechanism, which not only helps employees communicate and collaborate, but also provides consistency by common value, thus promotes innovation. Unexpectancy, risk and irregular solutions get involved in innovation, which traditional formal control mechanism doesn't work effectively on, thus space is left for insurance company culture. Cultural construction of insurance company is necessary for enhancing innovation capability. In order to set up innovative insurance company culture, the first step is to construct an innovative leader group. Based on that, scientific approaches should be employed to design, foster and keep insurance company culture.Since insurance companies' innovation capability is a kind of organizational capability, it must be related to the way by which people are organized for certain tasks, i.e. organization structure and business process. Thus organization and process become another component of insurance companies' innovation. Traditional pyramid-like organization structure of insurance companies needs processlization to strengthen innovation capability. Meanwhile, insurance companies should choose suitable organizational form, because organizational form affects innovation capability fundamentally.Information technology (IT) is another resource of insurance companies' innovation capability. The special significance of IT in insurance companies results from the special and important role information plays in insurance producing and company management. The boom of modern IT provides very good opportunities for insurance companies to promote innovation capability. In order to take full advantages brought by IT, insurance companies should conduct informationizationconstruction. At present, the keys of informationization construction lie in data mining (DM), client relation management (CRM), and core business process construction under standardization, etc.Clients' influence on insurance companies' operation is inevitable, however, the influence is becoming larger and larger. Thus insurance companies' conception and strategy related to clients decide innovation capability to great extent. To enhance innovation capability, insurance companies need to make a change from "product-centralism" to "client-centralism". The focal points of client strategy for insurance companies are the construction and operation of CRM to manage the relation between insurance companies and their clients. In addition, insurance companies still need to pay attention to the channel clients and other interest-related partners, because they have great influence on insurance companies' innovation capability.The last factor of insurance companies' innovation capability is performance evaluation, which lies in the center of the whole innovation capability system and strongly influence other five factors. According to the target of this essay, two kinds of performance evaluation should be emphasized, which are comprehensive performance evaluation frame of insurance companies and performance evaluation on innovation.Chapter 8 studies macroenvironments closely related to insurance companies' innovation capability cultivation, it is concluded that government and related industry organizations should perfect markets and supervision, and set up national insurance innovation system as well.The major conclusion of this thesis is as follows. The innovation capability of insurance companies helps insurance companies produce continuous innovation stream and maintain competence advantage. Innovation capability of insurance companies, belonging to dynamic capability, is a kind of capability inside the organization, and can be decomposed into six factors. Insurance companies should cultivate innovation capability mainly through six channels. Meanwhile, government and related industry organization should try to promote macroenvironments due to its great influences on insurance companies' innovation capability cultivation and utilization.The primary innovation of this thesis has been creating " theory of capability" of insurance companies innovation based on current studies and practices, the model of insurance companies' innovation capability is set up and systematic research is conducted. The second innovation of this thesis lies in exploration on insurance company culture thatis assumed to contain insurance culture in this research. Third, this thesis emphasizes on the influence, which channel clients and interest-related partners exert on innovation capability of insurance companies. This point is not only a theoretic innovation, but also has guidance significance for insurance companies experiencing growth style alteration. Fourth innovation lies in the analysis on relation between organization forms and innovation capability of insurance companies.