May 15th, 2013 by Tom Benton
Chad, Rob, Steve and I recently completed our overview of individual life carriers’ business and technology issues. The report, Business and Technology Trends: Individual Life Insurers, presents initiatives from 36 individual life carriers. Top initiatives include core system version upgrades and agent portal capabilities.
This report is part of a series on key business and technology trends in specific line of business segments in the US insurance industry. These reports are based on the expertise of Novarica’s staff, conversations with members of the Novarica Insurance Technology Research Council, and a review of secondary published sources. Both a free preview for non-clients and the full report for clients is available here.
If you would like to get more information on these topics, please contact Rob at email@example.com or me at firstname.lastname@example.org.
May 10th, 2013 by Matthew Josefowicz
Insurance Networking News has a nice write up of the Analyst Panel from the ACORDLOMA Forum this week.
I was glad that Chris McMahon captured this quote from me on evolution and revolution in the insurance industry, driven by IT changes:
“There is an evolutionary imperative and — closer than some companies think — a revolutionary imperative,” he said. “The evolutionary imperative is about efficiencies and streamlining processes, using third-party data wherever possible to accelerate the underwriting and claims process and companies are looking at their core systems to make sure that they can support those incremental changes that are coming shortly,” he said, including fully-automated underwriting, which is expanding across lines of business.
But he also spoke of structural changes that could occur. “There is a huge potential transformation in terms of the capital markets ability to access risk. The current configuration of reinsurer, broker, primary broker, corporate — all of that structure was designed to solve an information management problem that at its core is not an information management problem any more. Now, that [organizational structure] is held in place by cultural inertia, the regulatory environment, accepted behavior and experience. But it was developed to meet an absolute necessity, and the absolute necessity that it was developed to meet is no longer there.”
The full article is online here, and a my recent INN column has an expansion on some of these ideas.
May 9th, 2013 by Rob McIsaac
While participating in a panel discussion on e-Signatures and customer experiences for carriers at yesterday’s ACORD / LOMA Conference is Las Vegas, I started receiving alerts from a major airline. Apparently they thought that I might appreciate an upgrade to First Class seating on the red-eye back to the east coast later in the week. After my presentation wrapped up, I confirmed that their suspicions were correct. First class sounds great … and I suddenly find myself thinking about booking my next trip with them. Apparently, I am susceptible to good customer experiences!
This all reminded me that I shortly need to begin my annual search for next year’s auto / home owners insurance carrier. I dread the effort, but I’ve learned that there are economic consequences to missing the chance to do this. Actually, for 20+ years I was a loyal customer of one carrier. Sadly, one day, I discovered that they hadn’t considered sharing savings opportunities with me. A “flip” to a new carrier resulted in a reduction in the annual premium of $1,200 for comparable coverage. Why hadn’t they bothered to try and keep me as a happy, loyal, customer? With a little bit of care they could have retained and delighted me with periodic news of an “upgrade” to my coverages. Instead, I learned that this is a part of my financial life that requires a high level of personal involvement in order to achieve an appropriate value proposition.
With the advent of modern analytical capabilities, it should be within the reach of carriers to provide an engaging and high-value customer experience that can both delight and retain customers. There was a time when Amazon-like offers of “smart people like you might be interested in this” seemed remarkable. Today they seem not only routine but may well be part of customers starting expectation for relationships they anticipate keeping. In an era of easy access to market information, carriers need to upgrade their customer care capabilities or risk losing some of their best, and potentially most profitable clients.
May 6th, 2013 by Matthew Josefowicz
This monthly newsletter is sent to all Novarica clients to announce new research and activities for Novarica customers. If you do not wish to receive this newsletter on a monthly basis, please let us know at email@example.com and we’ll remove you from this update list.
- ACORD/LOMA. We’re presenting 6 sessions at ACORD/LOMA in Las Vegas next week. Topics include on supporting growth, modernization, core systems, e-signatures, and IT impact on business success. Check out the session descriptions here: http://blog.novarica.com/?p=1774
- Client Webinar. Reviewing recent research, ACORD/LOMA presentations, and announcing the Impact Award Nominees! Tuesday, May 14 at 2pm ET. You can register online at: https://www1.gotomeeting.com/register/168375841
- IASA. We’re presenting 4 sessions at IASA next month. Stay tuned for more info!
- Novarica Insurance IT Leadership Training Seminar. July 8-9 in Orlando, designed to increase business skills and industry knowledge for next generation of insurance IT leaders. http://www.novarica.com/seminar2013
- Save the date for the Novarica Research Council Impact Awards in NYC, August 21 and CIO Insurance Summit in Atlanta on September 11-12.
See all published research at www.novarica.com/research/
- Novarica Insurance Technology Research Council Meeting Report (www.novarica.com/councilmeetingreport2013). 95-page presentation-style report containing materials and discussion summary from recent Research Council meeting.
- Email Archiving and Compliance: A Checklist for Insurer CIOs. (www.novarica.com/report_email_archiving_2013). Evolving regulatory requirements and emerging technologies are putting pressure on IT organizations to update email archiving / management capabilities.
- Coming later this month:
- Updated Website. We’ve re-launched our website, with improved navigation, new content, and a live chat function! Notable new pages include:
- Blog. Our principals have been blogging about big data, core systems, regulatory changes, the 20th anniversary of the Web, and more at http://blog.novarica.com/
Thank you again for being a Novarica client. Please contact us any time directly or at firstname.lastname@example.org with any questions or inquiries.
May 3rd, 2013 by Tom Benton
On the list of important IT projects for insurance CIOs and their IT organizations, you would expect to find Policy Administration Systems, Billing, Claims, Illustrations… but maybe not e-mail. As Rob and I found out recently, however, e-mail issues are a significant pain point for many life/annuity carriers.
While email has become a necessary mission-critical IT service that may be taken for granted by business stakeholders, few systems are more visible if there is an outage or a need for support during a regulatory or legal inquiry. With changing regulations and interpretations, as well as new communication channels and technologies such as mobile and social media, CIOs and their organizations must ensure that email is not only reliable and efficient, but also properly archived and effectively managed to meet wide-ranging retention and compliance requirements.
In our new report, Email Archiving and Compliance: A Checklist for Insurer CIOs, Rob and I present information about issues, best practices and a checklist to consider when evaluating current systems and potential solutions. The report also includes insights from a survey of seven leading Life/Annuity insurers at various phases of researching and implementing systems. Among the survey results, over half of the respondents reported moving to or being willing to move to cloud-based components for their next generation solutions.
The report will help IT leaders start the conversation about their email systems situation and begin planning for any necessary changes. Contact us if you would like to discuss how these issues are affecting your organization.
May 3rd, 2013 by Rob McIsaac
In addition to my breakout session on Regulation Reform, I had the opportunity at the Research Council to present on IT Organizational Strategy, with a particular focus on what it takes for CIO’s to get, and maintain, a seat at the table with C-suite peers.
The discussion centered on a series of actions that CIO’s can take to allow them to become true business partners who can add significant value to carriers’ strategic planning efforts. These actions include developing improved understanding of communications styles, cultural issues, and organizational dynamics, as well as tactics for embedding technology into the business planning efforts for insurers.
Council members shared insights on what has worked, and what hasn’t, in their organizations. One of the key comments from the group focused on the importance of being “engaged” when the business conversation on problems or opportunities begin—being absent in the dialogue until a solution has already been selected is problematic on a number of levels.
Openness and transparency were also topics of high interest. There was a clear recognition of the importance of investing time to build relationships and trust with C-level peers.
In an era when IT is sometimes viewed as commoditized, and the understanding of how technology “can work” is being influenced by consumer-oriented (outside) experiences, the IT presence at the strategic table has never been more important.
May 2nd, 2013 by Tom Benton
I recently joined Novarica as a Principal after serving five years as VP, Technology (CIO) at Navy Mutual, during which time I was a Novarica client and active Research Council member. One of the highlights of my time as a client was attending the Novarica’s Research Council meeting in Providence a few years ago.
As a CIO, I found that the Research Council meeting is a great opportunity to interact with and learn from peer insurance IT execs. The agenda included a number of topics of interest, but the interaction with other IT insurance leaders is unique – personally I took away a number of ideas from my peers on issues we were facing at the time, including how to tackle challenges with core system replacements, ways to better meet the needs of business units, and ideas on improving engagement of business leaders in the IT process.
At this year’s meeting, held last week in Providence, RI, Novarica analysts presented recent research on Big Data/Analytics, Quick IT Benchmarks and IT Operational Strategy along with breakout discussions on hot topics like Climate Change and Catastrophe Modeling and how the Affordable Care Act is affecting carriers. There was still ample time at the dinner the previous night and during breaks for interaction with peers.
Some of the comments from CIOs attending the meeting were:
- “The annual Novarica Council meeting provides two key benefits: first, the research presented by Novarica analysts contains valuable and relevant information that stimulates discussions amongst peers; and second, it is provides a unique opportunity to hear first-hand what other companies are doing with technology.” – Judith Haddad, EVP and CIO/CTO of Patriot National Insurance Group
- “What a great tool to have in my CIO toolbag: other CIOs who share and discuss issues in a practical and pragmatic fashion. It’s a large enough group to get multiple perspectives, but focused enough to have tangible impact and value.” – Richard Wiedenbeck, SVP of IT at Ameritas.
Notes from the meeting are available to Research Council members at www.novarica.com/councilMeetingReport2013. Membership in the Research Council is free, and there are no registration fees required to attend Research Council meetings. Over 300 members participate through the Council in Novarica research. Senior IT executives can request their free membership here.
May 2nd, 2013 by Martina Conlon
In addition to my presentation on big data [link to prior post] at last week’s Research Council meeting, I also facilitated a breakout session on climate change and cat modeling. We reviewed weather trend information-and agreed that bad weather is the new normal we have to plan for. Most participants leverage cat modeling services from RMS, Air, and/or EQECAT for reinsurance planning, and several use the models for underwriting, as well. Larger carriers used more than one modeling vendor and a few also apply their own custom models. Several participants raised issues with the quality and level of documentation with some models, and expressed concern that some vendors position their offering as a black box.
We then moved on to discuss DR. Most carriers felt their DR plan was solid, but that they have fine-tuned it after each episode. Most participants said they proactively contact policyholders or agents with advice and tips prior to a weather emergency. Many carriers verify weather related claims with weather service information, with claims adjusters manually researching the information on the web. All carriers agreed that leveraging technology to anticipate weather events, appropriately price accounts, and minimize losses was critical for their organization moving forward.
May 1st, 2013 by Matthew Josefowicz
CERN, where Sir Tim Berners-Lee invented the World Wide Web (sorry, Al Gore), has re-posted the first ever webpage on its 20th anniversary. http://info.cern.ch/hypertext/WWW/TheProject.html
With the 10th ACORD/LOMA Forum
coming up and my 11th consecutive appearance on the Analyst Panel (including the last independent ACORD conference), it’s interesting to reflect on the fact that the web was already 10 years old in 2003, and most insurers were still debating whether it would really have an impact on their businesses.