How the Lack of Innovation Hurts our Industry

In April 2014 we celebrate the 10th anniversary of signing our first customer.  EZLynx has come a long way in that decade and, much against the wishes of some vested industry players, we have established ourselves as a successful, credible vendor in the industry. There is only one reason why EZLynx was able to accomplish this – innovation!

At EZLynx, we have always taken pride in delivering inventive solutions for vexing agency problems. I am proud of the culture of innovation we foster and encourage within the organization.  Unfortunately, looking at the industry as a whole, these 10 years have made clear why innovation in our industry is almost non-existent.

Now one of the easiest ways to encourage progressive thinking in any business is through competition and by encouraging new vendors to enter the marketplace. However, there hasn’t been any new vendor make a significant impact in our industry since EZLynx made headlines. This is a regrettable reflection on the status quo, and it will have a significant long term impact for us collectively.  Encouraging fresh ideas industry-wide is key to improving the situation, and to do this it’s important to understand first what it takes to cultivate innovation. The three fundamental requirements to do this are: open data standards, de-regulated industry and a culture of risk taking which encourages new ideas.

With our industry significantly regulated now and for the near future, it must be understood that we have to accept this as an obstacle towards originality. Indeed most well-known venture capitalists generally shy away from regulated industries because of this difficulty.  It signifies the unpredictable nature of our industry, which leads to an unpredictable ROI.   This has contributed to the lack of innovation, but for certain it has not destroyed it.

This leads us towards our second point, creating a culture of risk taking and fresh thinking.  While the business of risk management is traditionally averse to taking risks, permitting this attitude to prevail often creates apathy toward new technology and shying away from new ideas.  In addition, the depth of domain knowledge needed to create new products plays a huge role in deterring new vendors from entering the industry.  As with regulation, this factor is significant but isn’t fully responsible for the innovation problem.  I still believe that with a compelling product, built on a powerful idea, a new vendor can still establish themselves amongst us.  EZLynx is a good example of this!

With regard to open data standards, I encourage you to take a look at most other industries, especially finance, and you’ll see that the data exchange standards are very well defined. Ours also has defined standards, thanks to ACORD’s efforts, but regrettably most do not seem to follow or respect the standards. When we work with carriers for rating integration, one of their constant complaints is that EZLynx is a stickler to the standards, while other vendors are not, which slows down implementation with us. Our answer is always the same – standards are created to be followed. I do wish other vendors and carriers would make the same commitment to diligently following standards.  Imagine how much farther ahead we would be as an industry by now!

In the short term this non-compliance strengthens the existing big players, which is why the incentive to follow standards will not be spearheaded by them. In the long term this hurts who we all serve, which is the customer through our agency channel.  Standards compliance is, and must be, driven by companies like ours, with important help from Carriers too.

Finally, I want to mention some contributing efforts EZLynx is making to encourage new vendors. We announced a new EZLynx Marketplace concept in 2012, which allows third party vendors to integrate with our product and offer their services to our customers. As part of this architecture we introduced four new products in 2013 – eSignature, Lead Management, Policy Accounting and Bulk Email Campaigns. We will continue to promote this concept in 2014 to bring more vendors to our Marketplace platform. I strongly urge all of you to make a New Year’s commitment to follow the industry standards and encourage innovation – our industry will be better for it.