“There are countless benefits to creating an independent spin-off or startup”
On this year’s World Creativity and Innovation Day we commend the win-win strategy of collaborating with startups and starting new businesses, which makes up the backbone of models like MAPFRE Open Innovation, our strategic commitment to customer-centered transformation. Innovation is an intangible asset that plays a key role in growth.
MAPFRE’s Global Head of Transformation, Joan Cuscó, recently went on Europa Press’s Generación de Oportunidades podcast along with McKinsey to explain MAPFRE’s Open Innovation model (MOi). More than 1.5 million customers have benefited from solutions originating from this model. He also talked about MAPFRE’s commitment to investing 1% of gross profits to innovation initiatives.
MOi integrates different lines of work: besides collaborating with startups and scaleups through insur_space, which just closed its fourth call for projects, it also encourages investment in venture capital, in building new businesses, and in acquisitions that enable growth.
MAPFRE uses 4 traditional innovation mechanisms, also known as Health Partner Invest, to decide which new business, product, and service models will be created, bringing together collaborations with startups all over the world through insur_space. MOi helps support the entrepreneurial ecosystem by making venture capital investments through the Alma Mundi fund. Likewise, when the company sees an opportunity, it helps build new businesses from the ground up, as was the case with Savia, a health services business. The company also makes acquisitions that help its investment model grow and spread internationally.
When asked whether MAPFRE is incorporating business models similar to startups, and what challenges and opportunities might arise from these collaborations, Cuscó insisted that “there are many advantages to creating independent spin-offs or startups”. One advantage, in terms of attracting talent, is that it can intrigue certain profiles that the company is looking to target. It makes it possible to design business models and technological architecture from the ground up, “without what we would call a legacy,” he noted. The model makes it easier to work with distribution channels outside of the insurance industry, and, most importantly, it tailors each investment to the business’s exponential growth plan, instead of diving into a very expensive and highly uncertain investment that would provide, at best, flat and practically unnoticeable growth. “Once the model has fully developed and matured, we can integrate it into our parent company without any issues,” he said.
Mobility and Health
The new business models that are proliferating in the insurance industry are mainly those in the area of mobility and health. The wave of new models of shared, personal, connected, intermodal, and urban mobility has led insurance companies to focus their products on people and journeys, rather than on vehicles, in Cuscó’s opinion. Real-time data and predictive models are becoming increasingly important due to this shift, complimenting or even replacing the historical data or statistical models that we normally use. In addition, the demand for health services and scientific advances, like gene editing, is making it so that health insurance “doesn’t just provide health coverage when it’s needed, but is also trying to preventing illness or disease from happening in the first place.”
Besides MAPFRE, representatives from Aena, Amazon World Services, BBVA, Enagás, Esade, Grupo Red Eléctrica, GSK, Iberdrola, Ikea, and Telefónica also participated in this program. All of these groups are committed to driving and advancing innovation through collaboration with startups, establishing mutually beneficial relationships.
According to a recent report from McKinsey, innovation is an intangible asset that plays a key role in growth, and companies have been driving innovation since transformation and adaptation have become a necessary part of dealing with the COVID-19 pandemic. This still remains unfinished business in Spain, however.
The simple truth is that innovation is not a choice, but a mechanism for dealing with challenges that are coming our way. In 2018, MAPFRE Open innovation committed to investing 1% of its gross profit in innovation initiatives. Since then, it has benefitted more than 1.5 million people worldwide.
According to the latest Social Perception of Innovation survey conducted by Cotec (in which MAPFRE is a trustee) and SigmaDos, innovation is considered to be a key ingredient to inspiring faith in SMEs and large companies.