Matthew Josefowicz
My recent interview with Insurance Networking News is now online. Topics include:
- Overview of the Novarica Insurance Technology Research Council and plans for 2012
- Mobile and Social media
- Modernizing core systems strategies
See the full 6:20 minute interview at Insurance Networking News
Matthew Josefowicz
The 2012 Bankers as Buyers report was released today, and is available for free from the William Mills Agency here.
This valuable report brings together research from leading advisory firms, including Novarica. In addition to our comments on general trends and issues in banking IT for this coming year, it also includes a feature article we wrote on the new importance of technology in serving small business customers.
You can download a free copy of this 75 page report here.
Matthew Josefowicz
Insurance is an information business, and the CIO has a critical role in creating value for the insurer enterprise. But the nature of how different CIOs embrace that role, the different types of value they can create, and the tools they use to create that value varies widely. Our new report, Creating Enterprise Value as CIO presents a look at how more than 100 insurer CIOs see their role in creating value and the factors that support or inhibit them in their mission.
Some of the key findings of the report are:
Matthew Josefowicz
Somebody had to be first.
Apparently, it was BBVA, one of Spain’s largest banks, which announced its intention to move 110,000 employees to Google Apps for email, calendaring, docs, chat, video conferencing, and collaboration.
Given the notorious strictness of European data privacy regulations, if cloud computing for these kinds of productivity apps passes muster at European financial institutions, it will get a serious second look here in the US.
For more of our posts and reports on Cloud in US insurance, see http://blog.novarica.com/?category_name=cloud
Matthew Josefowicz
Novarica research and insights on insurance policy administration system strategy were featured heavily in the article “Replacement Value” in the January 2012 edition of Best’s Review. Click here to download a PDF of the article.
As active readers of this blog and our research are no doubt aware, insurance policy administration strategies and vendors are a major area of focus for us at Novarica. Our US Insurers IT Budgets and Projects for 2012 report showed that more than 1/3 of insurers are either already in the midst of, or planning a policy administration system project for 2012.
An excerpt from the article is below:
“This is really about re-engineering the core processing systems of the organization. If the business side isn’t fully invested in almost co-developing the projects — or participating in it on equal footing with IT — it’s much harder for these projects to conclude successfully.” [Josefowicz said]
Hersh suggests that carriers begin replacement with a clean slate.
“Don’t base what you will do off what you’re doing today. If the goal is to replace your system, then you need to start over. The goal ought to be to reinvent the system by replacing it. Carriers need to have a clear, articulate argument for why and how that’s going to happen.”
Click here to download a PDF of the full article.
Matthew Josefowicz
Happy New Year!
Looks like the beginning of another interesting year for insurance software M&A as Cover-All announced their acquisition of BlueWave this morning, giving the policy admin and BI solution provider a claims systems to add to their suite.
As Chad and I noted in various articles last month (blogged here), the “best-of-breed suite” or “componentized suite” is becoming the dominant model for insurance core systems buyers. We expect additional acquisitions throughout the year.
For those who want to get caught up on the dynamics in the space, our 2011 Q3 report on M&A in the insurance software marketplace is a good place to start.
Matthew Josefowicz
Interesting press release from The PIA Partnership caught my eye this morning. The headline is “New Research by The PIA Partnership Shows Insurance Customers Want What Independent Agents Offer.”
I haven’t seen the actual report, but it was interesting that most of the findings cited in the press release mentioned “agent or company.” For example:
5. 79% of customers want to be contacted by their insurance agent or company when their policy renewal date is approaching.
6. 81% of customers want to be contacted when their insurance agent or company has a suggestion for how they could save money on their insurance.
7. 67% of customers would like to receive contact from their insurance company, agent or agency every 6 months or less to inquire if there are any changes in their life or circumstances which could create the need for change or adjustment in their insurance.
I agree with the headline that independent agents can offer these things to their customers and need to do so in order to be successful.
But to me, these survey results don’t say insurance customers want agents specifically. It says they want attention and value, but they don’t really care whether that comes from the agent or the company. Regarding the unique value of independent agents, the press release announced this finding:
2. The fact that agents are able to offer them a choice of companies (and coverages) is not the most important thing. What’s important is what agents are able to do for them. From the customer’s point of view, what’s important to them is agents deliver value.
This is huge. The ability to offer a choice of companies has long been positioned as the unique differentiating value of independent agents, and this survey is saying customers don’t think this is the most important thing and they are looking for another source of value.
All of this points to the point I made in my column at Insurance Networking last year — agents need to be able to compete on service and advice based on active customer engagement.
Matthew Josefowicz
Nathan Golia and the I&T team have a nice round up on 11 Burning Insurance Industry Questions That Will Be Answered in 2012, which includes a few Novarica perspectives:
Chad Hersh on Policy Admin:
“Carriers have swung from monolithic suites to best-of-breed systems, and now to best-of-breed suites,” observes Chad Hersh, a partner in New York-based research and advisory firm Novarica. “Best-of-breed suites have emerged as a significant preference, as the majority of best-of-breed vendors have expanded their offerings to include billing and claims.”Carriers appreciate the reduced integration effort associated with best-of-breed suites, Hersh notes. But, “If history is any guide, we can expect another shift down the road,” he cautions.
Me on Vendor M&A:
Novarica partner Matthew Josefowicz predicts that more independent software vendors will be acquired by services firms, in the manner of Wyde/Mphasis and Duck Creek/Accenture. “This is driven in part because most insurers have shifted to a ‘buy’ rather than ‘build’ mentality. Another reason is that the componentized suite is becoming the dominant model for software vendors,” Josefowicz asserts. “This is likely to drive consolidation of vendors that provide only a single point solution.”
Martina Conlon
Over 10 years ago, large carriers began delivering agent portals to reap big benefits in operation efficiencies and agent satisfaction. Early portals focused on policy, billing and claims inquiry and new business quotes and transactions for selected lines of business. Today, agent portals are table stakes for carriers of all sizes, delivering policy change, renewal, cancellation, document delivery, and automated rules and workflow capabilities for personal and commercial lines of business. Most carriers have homegrown portals in place – personal line portals tend to be mature and highly functional, while commercial lines portals are still maturing and are an area of focus for many carriers.
As we know from Karlyn Carnahan’s recent agent survey, agent portals matter. Agents tend to place more business with carriers that offer the robust portal. With modern technologies, carriers have the unique opportunity ahead – features like enhanced workflow, dashboards and online reports, online collaboration and improved document exchange capabilities can differentiate a carrier from the competition.
In our newest Novarica Market Navigator on P/C agent portals, Lis Maguda and I profile 10 solutions that can accelerate portal delivery and provide key agent facing functionality. Each vendor offers a unique strength – whether it is market position, focus on selected lines of business or unique collaboration, connectivity or configuration capabilities. If you are considering significantly enhancing or re-architecting your legacy portal, or are delivering first time capability to your agents, check out this report to see the options to help accelerate your efforts and potentially reduce risk.
Karlyn Carnahan
I just published our third agency survey report and as always, the results are very interesting. We asked over 500 agents across the country what it takes for a carrier to get their business, how they prefer to work with carriers, and what are their own plans for the future. The findings are consistent: whether the agent focuses on property casualty or life, personal or commercial, whether the agent is a producer, principal or CSR — technology is a major part of the answer.
Agents identified responsiveness of underwriting new business, speed of underwriting, competitive product offerings, and claims services as the key factors for determining where to place business. Beyond those top criteria, there are some additional priorities – and there are some differences in importance by role. Portals are highly important ways of providing those capabilities. Martina Conlon has just published a report that describes the vendors that can accelerate the development of P&C insurers’ portal capabilities.
As expected, there is a great deal of alignment between agents are looking for and what their top carrier is providing. Top carriers are doing a good job of providing the capabilities agents are looking for – which may be why they are the top carrier. They are setting the standard that others must meet.
What are agents planning for the future? Across all roles, most agents are planning to grow their business over the next three years. All agents are looking to add more commercial customers. Life carriers also rank adding more personal/individual customers quite highly. To support this growth, agents are planning to invest in technology and automate workflow. Additionally, they are planning to increase their customer accessibility by expanding customer web transactions and expanding use of mobile technology and social media.
For carriers, this continues to emphasize the importance of providing agents with a good technology experience. Carriers successfully winning in this increasingly competitive playing field will be those that are aligned in offering the capabilities agents demand.
To learn more, check out the report here http://www.novarica.com/agent_survey_2011