Technology as the starting point of innovation: Nationale-Nederlanden wants to get serious about data and smart sensors

Sometimes innovation challenges are very clear. The customer has a need, and through research, you arrive at a solution that you then validate through experiments. But what if there is no customer need?

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Karan Shah, Senior Innovation Lead at Nationale-Nederlanden (NN), was asked by NN Zakelijk Verzekeren whether data and sensors could be used in damage prevention. For years, the deployment of sensors has proven difficult within the insurance industry because it is difficult to prove what exactly prevents damage.

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It became a journey that eventually brought Shah to experiment designer Mirte Vendel of MakerLab. And yep, the two are about to explore the Golden Fleece of insurtech together!

Data-driven innovation is really the magic word.

Karan: 'Just like all insurance companies, NN has been grappling with the question for a long time: what can we do with data and IoT (Internet of Things), where physical objects connect and exchange data through sensors and apps? There is a lot of potential in smart sensors and using data in the right way for damage prevention.'

Mirte: "Insurers in the Netherlands, and beyond, just have great difficulty finding a good customer proposition and making a viable business case for using sensors.

Karan: "NN aleady made an attempt five years ago, but it didn't succeed at that time.

Mirte: "The technology wasn't ready for it then.

And yet they all seek the Golden Fleece.

Karan: "Definitely. The question from the MT was broad: we want to do something with sensoring, go figure it out. As Innovation Lead, I'm used to open-ended questions. I got an investment to do research and looked for an experiment designer to help me with that.'

And there was Mirte.

Karan: 'Yes. I believe the question I posed at MakerLab was: I need someone who understands the technology and can translate it into proposition development.'

Is this project unique within NN?

Karan: 'Most innovations at NN no longer have anything to do with insurance, they are very far from the original business model. This proposition is very close to the core - it's about damage prevention.'

So, potentially a big deal.

Karan: "This initiative comes from the Business Insurance business unit of NN. All projects have to be approved by the MT. That's kind of a Shark Tank setting with four, five investors for whom you do your pitch and they ask you questions and challenge you.'

But it's also not a standard design process for MakerLab?

Mirte: "True. Most innovations start with a customer need, a pain point you want to address. In this case, there is no customer need but rather damage. We began with the question: in which sectors is the most damage occurring? We researched the sectors and established a focus within them.'

Karan: "The technical validation has also been crucial. We started looking at risks and causes. And at the same time we asked sensor suppliers what they could measure. Then you constitute a solution, in theory, that you want to test in practice.'

Was the technology ready for it this time around?

Mirte: 'It sounds very easy: you put up a sensor, data comes out, and you analyze it. But it turned out to be more challenging than everyone claims in terms of connectivity, software, and hardware. There is a lot possible, but everything comes with limitations. You have to weigh the pros and cons of the different options against each other. By engaging in conversations with experts and trying everything out, we have validated what is achievable and also what is or isn't essential for our product.

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Only when we had some sensors providing useful data did we start looking at the business case again: what will this cost? Who is willing to pay for it? What is the role of NN? And the insurance advisors? And the customer?

The main focus is on internal communication towards the business. It is a project in which a lot of collaboration takes place with people from the business, and in which existing customers participate. To manage this effectively and obtain the right information as much as possible, active communication channels have been established. These channels include technical risk experts, product management, and account management.

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There are quite a few people who (will) be affected by this project.

Karan: 'Mirte and I can collaborate well, but we cannot do this alone. We also work together with account managers, insurance advisors, technical risk experts, various experts, and implementers within NN. Their core task is not to assist us, but they do so alongside their main responsibilities. We are very aware of this. We have established active communication channels with all these employees to involve them at every step of the process. It was essential for them to become just as enthusiastic about this exciting project as we are.'

And was that successful?

Mirte: "Certainly. But the reverse also holds true. It's easy for us to say, "Oh, the account managers should take care of that," but they already have so much on their plate. By talking to all those involved, we found out that certain changes truly required a significant effort from everyone. In that case, you want to know: when is it worth it for you as well? And: how can we make this align better with the existing workflow?

Karan: "That support is super important. If this is going to be a real service of NN, these are the people who are going to do it, they have to believe in it. So, it's important to involve them from the beginning.'

And you ran a pilot with customers?

Mirte: 'Thanks to the enthusiasm of the account managers and insurance advisors, we have been able to install sensors at a large number of customers. We have also been able to take a behind-the-scenes look at many more business customers to assess which solutions may be suitable.'

And where are you now?

Karan: "We now have the technical solution reasonably validated - we have developed sensors that can be deployed to prevent certain damages. But the next question is: who is going to pay for it? In the first pilot, B2B customers got everything for free, now they have to start paying for DataSmart, as we call the product.'

Aren't you afraid that competitors are watching?

Karan: "It's new intellectual property that we're creating. We are trying to protect it, but that's difficult. DataSmart is an add-on to our products, but in the future we could offer DataSmart more broadly. This is something we are still exploring.'

An incredibly exciting final phase, then?

Mirte: 'Certainly, it's very enjoyable to see everything come together. As an experimental designer, you're not always involved until the end, and now I'm experiencing all those phases.'

Karan: "There was so much involved, from stakeholder management and being the focal point of the project to working out the experiments and diving deep into the technology. Mirte's role has been much more than that of an experiment designer. I would call it proposition shaping.'

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