On the tech vendor side, I always had a simple rule for managing business units and product portfolios : balance high-return innovation bets with scalable revenue engines. Too much of the former and you lack a reliable revenue pipe. Too much of the latter and you lose differentiation. Both are killers.
I’ve been thinking about how this lens applies inside a (re)insurance company – specifically to the in-house tech and change portfolio. The equivalent isn’t always framed this way, but it’s there.
The ‘Revenue Engine’ side is the ‘Delivery Track’
The equivalent of keeping the SaaS subscription humming. Modernising core systems, MI and reporting, regulatory compliance, workflow automation. Not glamorous, but it’s what keeps the engine running and provides continuous improvement. The game is cost avoidance and cost reduction, which leads to ratio impact.
The ‘Innovation Bet’ side is the ‘Discovery Track’
Work on areas like AI, parametric triggers, embedded distribution, prevention-as-a-service. Experiment with innovation bets, while testing for value, feasibility and viability before scaling. Most of it won’t scale, but a few wins could change the trajectory.
The discovery track projects are unlikely to surpass the delivery track projects on the traditional insurance company CBA frameworks of ER impact, LR impact, risk reduction, etc. Looking at change through the CBA-only lens risks missing out on future advancements.
On the other hand, constantly running behind the shiny new tech produces a cost centre that does not deliver outcome.
Overweight the engine – stable but undifferentiated tech shop. Efficient, but commoditized.
Overweight the bets – endless POCs with no production adoption (the classic AI trap).
Don’t run a cost centre, manage a portfolio like an investor. A healthy balance comes from allocating deliberately across horizons :
Core (70%) : keep the engine stable, modern, efficient
Growth (20%) : extend capabilities through new analytics, automation
Frontier (10%) : place measured bets on innovative tech
Like any investor, diversify risk, fund optionality, and avoid being overexposed to any one play. The goal isn’t to chase every emerging tech fad, nor to only make safe bets at the expense of innovation. It’s to run a balanced portfolio where today’s engine delivers scale, while tomorrow’s bets build relevance.
