How Zurich Insurance Group uses its annual Innovation Championship to harness the innovative potential of startups for long term success.

Innovation at Zurich Insurance Group is characterized by a mindset that embraces challenge head-on.

As Mattia Visigalli, Innovation Consultant - Group Strategy and Innovation at Zurich Insurance Group, says: "Future-proofing our organization involves falling in love with problems because these problems are the key to finding innovative solutions.”

Beyond internal innovation, Zurich is also continuously looking for solutions externally. In his recent talk for Innov8rs Learning Labs, Mattia explored the different ways the organization collaborates with external partners, and how its flagship external innovation program - the Zurich Innovation Championship - is essential to harnessing the power of startups for the corporate world.

This includes searching for zebra startups, a profitable and sustainable alternative to unicorns.

Mattia Visigalli

Innovation Consultant - Group Strategy and Innovation at Zurich Insurance Group

Zurich’s Open Innovation Strategy and Ecosystem

Zurich’s collaboration partners span a range of different entities within a mature and well- structured open innovation ecosystem.

The organization collaborates with startups, academia, corporate peers, and other external partners including venture capital firms, accelerators and incubators, NGOs, and hackathons. This extensive external network helps Zurich scout for cutting-edge technologies and insights, which in turn helps to foster a culture of learning and exploration.

The Zurich Innovation Championship is an important link in this chain. Launched in 2018, the program initially served as an exploration exercise to build internal capacity for managing its partnerships. Over the years, this has evolved significantly, and the program now provides a way for Zurich to form sustainable partnerships with startups that contribute to its strategic objectives.

The Zurich Innovation Championship - a Flagship Program for Startup Collaboration

Evolving from its humble beginnings, the Innovation Championship now takes place yearly and has attracted an impressive 3,300+ applications from startups around the world who are keen to collaborate with Zurich.

With so many applicants to sift through, a rigorous selection process is crucial.

It begins with a strategic look inside the organization, by asking Group leadership what direction they want to take the business in. The customer-facing side of the company is also consulted on the latest trends and customer insights in the market, followed by business leads for different regions - who have the opportunity to feed back on the biggest challenges they’d like solving.

These responses are then broken down into themes, which provide the submission categories for the Innovation program. In the most recent edition these topics included digital simplification, retail P&C and life & health - with the categories kept intentionally broad so as to not limit any innovation potential from the start.

Consulting different areas of the business on their needs ensures both an internal buy-in for the program and a selection of startups that aligns with Zurich’s strategic priorities.

Zurich’s strength of commitment to this is shown in the fact that it’s the business units themselves who carry out the first round of selection for program applicants. Once past this stage, the business units and startups work together, pitching their joint value proposition to leadership in order to be selected for a global accelerator. This ensures that the startups enter into true collaboration with Zurich from the start.

The Recipe for Success

After selection, the startups enter the validation phase of the program, which takes place within a four month accelerator. This is designed to find out if the startups are viable collaboration partners for Zurich in helping reaching key objectives.

Zurich’s validation framework assesses startups against three criteria:

  • Desirability (will it solve our problem?)
  • Feasibility (given the challenges startups face when collaborating with a multinational company, will it practically work?)
  • Viability (how will we define the go-to-market strategy and bring value to the market together?)

A key part of the program, as Mattia states, is that it isn’t limited to insurance startups: "We don't just work with insurtech; scouting for solutions that can be integrated into the value chain of insurance is a key proposition of our program," he says. This principle has seen Zurich collaborate with startups in fields as diverse as epigenetics, digital wallets and mental health.

The Innovation Championship has seven main ingredients: the initial selection of innovative startups, strategic alignment of startups with Zurich’s goals, the commitment of senior leadership to the program, the ownership business units have of the process, and the thorough validation exercise which assesses the viability of the partnerships. Add to this internal awareness and external awareness of the program, which secures buy-in from the business and attracts high-quality applicants, and it’s a recipe for success.

The Zebra Startup: Looking for Stripes, Not Horns

Success in the startup world has traditionally been focused around unicorns - companies which have achieved a $1bn valuation. But Zurich takes a different approach.

Rather than looking for unicorns, which prioritize growth at all costs, and are therefore dependent on raising capital, Zurich prefers a stripier alternative. This is the zebra.

Popularized in a 2017 Medium article, zebra startups balance profitability with sustainability. In a departure from the conventional startup narrative dominated by valuation, disruption and competition, zebra startups present a collaborative and integrative approach. They’re therefore much better suited to working in partnership with corporates.

As Mattia notes, programs such as Zurich’s Innovation Championship are a particularly good option for these startups now too, as global VC funding rates decline and the unicorn birth rate has plummeted. “Even though collaboration with corporates can be a challenge, it’s a good option for startups now,” he says.

The sustainability offered by zebra startups comes into its own after the program has ended, as startups attempt to capitalize on the momentum they’ve built up through collaboration with Zurich, and achieve long term, self-sustained success.

Bridging the gap between the end of the program and the Valley of Death - as the period is known when a startup has begun operations but not yet generated revenue - is notoriously difficult. Zurich has therefore come up with a framework to help its startup collaborators to scale effectively, and roll out their innovations across the organization.

To ensure startups maintain their core values as they scale, the BRIDGE framework helps startups keep their focus on being Balanced, Resilient, Impactful, Dedicated, Global and Empathetic (BRIDGE). It provides each startup with a global product owner from Zurich to oversee their scaling process, as well as a project manager in every business unit to help them coordinate their efforts in different markets.

In Summary

As Zurich continues to refine its approach to scaling innovation, their focus remains on deepening the engagement with the startup ecosystem and enhancing the internal mechanisms that facilitate the adoption of innovative solutions.

By maintaining a strong commitment to collaboration, sustainability, and strategic alignment, Zurich aims to not only solve immediate business challenges but also secure its position as a leader in innovation within the insurance industry.

Zurich's collaboration with zebra startups is rooted in a shared vision, where startups provide a bridge between corporate objectives and innovation. By partnering with startups that embody these values, Zurich aims to enhance its product offerings, streamline operations, and address customer needs more effectively. As we’ve seen, this collaboration process is designed to be mutually beneficial, offering startups access to Zurich's global platform while enabling Zurich to tap into cutting-edge technologies and innovative business models.