- Buzz on the Show Floor – from the opening reception to the closing of the show floor, there was a buzz as attendees from carriers and vendors had great discussions. IASA found great ways to engage attendees in the show, including a twitter contest with an iPad mini giveaway – see entries from my account (@T_Benton) by searching for #IASA2013.
- Solid Show Logistics – IASA knows how to run a trade show. I attended their annual meeting (I spent 10 years as a CIO at a non-profit) and IASA shows every sign of a healthy non-profit organization: solid focus on mission, strong leadership, growing financials and an engaged membership. Any organization that can get volunteers to do a country-western line dance flash mob at their annual meeting has something going for it!
- Great Vendor Meetings – Novarica folks met with many software vendors – mine were mainly with vendors providing solutions for Policy Administration and CCM (Customer Communication Management). Many of these vendors have built systems on modern architectures and are now providing innovation and improved delivery processes as well as maturing SaaS offerings. Insurance core systems are maturing to the point where the buy-build decision is becoming a buy-subscribe decision.
- Interesting Sessions – due to all the vendor meetings, I was not able to attend many sessions. However, I did attend the following:
- Tuesday keynote, with Peter Diamandis of the XPrize foundation – he encouraged attendees to have a positive view of the future – that exponential knowledge growth means all world problems will be solved in the next few decades and that we are facing a future with a world of “abundance” (title of his new book). He also predicted that self-driving cars and other technologies will have a huge impact on the insurance industry.
- Tuesday’s Analyst “Around the Horn” – an annual event where analysts from four major Insurance IT consulting firms comment then get voted off one at a time through three rounds. Novarica was well represented by Chad, who bowed out in the final round, but made some memorable quotes, like “I spend too much time reading about core systems – and my wife agrees”.
- Wednesday IT Town Hall – panelists and audience members talked about reducing infrastructure costs, the challenges of staffing for big data/analytics and how to approach mobile strategy.
If you are registered for the IASA Annual Conference, you’re likely gearing up to head to DC soon. Like me, you probably are getting lots of invitations to visit vendors at the Business Show and making plans to meet with colleagues and friends. With so many sessions and things to do, it’s important to do a little preparation. Here’s a checklist of things to consider as you get ready for IASA:
Pack your walking shoes
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 reinsurance market is getting very competitive:
-PE firms have capital and are figuring out ways to structure deals in ways that overcome the fickleness of a hedge fund.
-Insurers are retaining more of their book of business.
- There is no expectation of the hard markets of the 1980s and their 50% rate increases. Instead, rates are increasing gradually, and hard markets are seen as shorter, narrower.
- The current economic environment and gradual rate increases create a need to earn returns in underwriting. Back to basics!
- Actuarial models are incomplete and are not thorough for weather events such as tornados and flooding. Historical data no longer is as relevant in a time of 100 year weather patterns, urban sprawl and larger house sizes.
- Workers Compensation has some of the highest year over year rate increases driven by losses. The aging workforce, a rise in obesity and growing medical costs are impacting workers compensation. One panelist even mentioned that work stations were designed for a fit 25 year-old and they are now experiencing more claims around backs and shoulder are common.
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
At The Life Insurance Conference this week in New Orleans, Rob McIsaac, Tom Benton and I had the opportunity to present on the topic of e-processing. The event, which is co-managed by LOMA, LIMRA, the Society of Actuaries, and the ACLI, had the largest number of carrier attendees we’ve seen in years. The topic proved popular with nearly a full house, which I found ironic since we’ve been discussing this topic for the last decade.
Our presentation focused on the “app through issuance” process, and approached the topic from three viewpoints—the high-level viewpoint of the analyst, a more narrowly focused view of bringing the theory down to reality, and the carrier’s viewpoint based on Tom Benton’s recent experience implementing a modern solution that included new business, underwriting, and issuance (among other areas). Topics included those three areas and how they can be improved through e-processing. We dived down into the implementation process and how to improve success rates through better implementation approaches and program structures, as well as developing models for execution and governance.
Additionally, we took a look at the common challenges carriers face when undertaking e-processing projects, as well as the potential pitfalls. We looked at the benefits that Tom expected from his implementation, as well as the benefits actually achieved. Overall, our joint conclusion was that these projects—though difficult—have a strong ROI and are a key aspect to staying competitive among increasingly tech savvy agents, brokers, and new distribution channels.
Novarica News & Events:
- Karlyn Carnahan at PLANS 2013: Industry Transformation and Trends on April 8. More information online here.
- Tom Benton, Chad Hersh, and Rob McIsaac at The Life Insurance Conference 2013: E-Processing: From Application to Issue. More information online here: http://www.limra.com/Events/Conferences/2013/2013_Life_Insurance_Conference.aspx
- Research Council Meeting Rescheduled. Due to the severe weather last month, we’ve rescheduled our annual Research Council Meeting for April 25. Details are online at http://www.novarica.com/council2013
- 2013 Impact Awards and Best Practice Case Study Compendium (http://www.novarica.com/impact2013). We’ve received more than 30 submissions for the 2013 Impact Awards and Case Study Compendium, and we’ll be announcing the nominees this month.
- ACORD/LOMA Sessions Announced (http://blog.novarica.com/?p=1774) . We’ll be presenting at ACORD/LOMA on supporting growth, modernization, and IT impact on business success. Our sessions descriptions are online here.
Insurance Software M&A 2013 Q1 Update. Recent acquisitions in the insurance software sector—SAP’s purchase of Camilion, Genstar Capital-backed Insurity’s acquisition of AQS, and Applied Systems’ purchase of IVANS—are a harbinger of things to come.
Business and Technology Trends
Business and Technology Trends: Specialty Lines. In the face of increasing profitability pressures driven by highly competitive marketplace conditions, specialty lines insurers are turning their technology strategies toward policy administration system replacement, business intelligence, and rating.
Business and Technology Trends: Group Life/Annuities/Voluntary Benefits. Group life/annuity/voluntary benefit insurers are investing heavily in benefit and policy administration systems, customer and agent portals, and easy enrollment capabilities to drive profits in a challenging market.
Best Practices in Insurance Software Negotiations. With the continued high level of activity in the insurance software space, carriers have become savvier about negotiations and constructing contracts for the new software and services. This brief provides a checklist for considerations during the negotiation process.
Maximizing the Strategic Value of IT: Nine Key Points for Insurance Business Leaders. This brief outlines nine steps business leaders can take to increase the effectiveness of their business/IT partnership to run, grow, and transform the organization more effectively.
Avoiding the Pitfalls of Over-Customizing: A Checklist for Policy Administration Systems Projects. This brief provides a checklist to help CIOs frame modern PAS implementation projects as a development of new, improved business processes, rather than an adaptation of a new system to the current state.
Quick IT Benchmarks
Quick IT Benchmarks for US Insurers: Overall Averages 2013. This report presents an analysis of responses to the Novarica Insurance Technology Research Council’s Quick Benchmarking Poll, which takes a “Supply and Demand” approach to IT rather than focusing exclusively on spending levels.
Chad, Karlyn, and I will be speaking at a number of this year’s ACORD/LOMA Forum, on topics ranging from modernizing your distribution channels to preparing insurers for new technologies and business strategies in 2014. If you’re planning to attend ACORD/LOMA this year, please let us know.
Our sessions are:
Tuesday, May 7
- 2:15-3:30 PM. Creating Market Expansion Capabilities: Capitalizing on New Growth Opportunities (Karlyn Carnahan)
There has never been a better time for insurers to develop a strategy for capitalizing on new growth opportunities. The marketplace abounds with opportunities for carriers to offer critical products and services to commercial and private businesses. This panel discussion will cover how to get started on setting up your business for successful expansion, outline the benefits of industry partnerships and provide a comprehensive overview of the technology available to successfully expand your business to serve the markets you want to serve.
- 2:15 PM – 3:30 PM e-Signatures: Implementers Discuss Their Experiences and the Benefits of Adoption (Rob McIsaac)
Wednesday, May 8
- 8:30-9:30 AM. Evolving Your Distribution Channels: Modernization That Matters (Karlyn Carnahan)
Insurance isn’t purchased the way it was a decade ago. Unfortunately, insurers have maintained static distribution channels with little potential for significant growth. So, how can insurance distribution channels change with the times? For insurers, the evolution of distribution channels is modernization that matters. Attend this session to learn how automation can help distribution channels roll with the punches and improve producer management at the same time.
- 10:00-11:15 AM. Analyst Panel: What is New in 2013 and What Should We Expect in 2014? (Matthew Josefowicz)
While many new technologies and business strategies are discussed during the event, is anything really new that is changing the industry? This panel will present point of views from the analysts on what is new this year and how much change is really happening within the industry. Panelists will discuss the major industry changes of 2013, whether insurers are really innovating, and what we can expect in 2014.
- 1:15-2:15 PM. Core Policy Transformation: Real-World Insurer Stories (Chad Hersh)
This interactive session brings together technology, consulting and data conversion industry experts to discuss the different strategies insurers are taking to fundamentally improve their business. Hear real-world stories of insurance transformation from the teams that are executing on these projects. Topics will include understanding the compelling business reasons to transform, including product agility, excellent customer service, and reduced cost; and how business context impacts transformation strategy and business value of modern application architecture in a changing insurance value chain.
- 2:30-3:30 PM. IT Initiatives That Deliver Business Impact (Matthew Josefowicz)
This panel of insurers presents case studies of real-life IT projects that delivered business impact by adopting new practices, delivering quick hit new capabilities, expanding the capabilities of existing systems, or transforming entire platforms. Learn how these insurance IT leaders worked with their business partners, overcame challenges, and delivered real business impact.
I’m pleased to announce that this week we are formally re-launching our Banking practice under the leadership of my new partner, Rob Rubin. Rob is the former CEO of Facilitas, an independent advisory firm that we’ve recently acquired (full announcement is online).
In addition to the personal expertise of Rob and his team in areas relating to online customer experience and the impact of digital channels on customer acquisition, our new practice also includes unique insights from the FindABetterBank.com web property, where tens of thousands of consumers per month from all across the country show us directly what’s most important to them in choosing a bank.
Rob has presented his research and strategic insights to many bank and credit union clients and industry groups, and will be joining the rest of the Novantas team at BAI Retail Delivery 2012 next month in Washington DC. If you’d like to meet with Rob to learn more about our new focus, please let us know.
The Novarica team is preparing to head to San Diego for the IASA Conference next week, where a number of us will be presenting in sessions.
Chad Hersh will be presenting
- Monday at 3:30, in Session 271 Automate Excess and Surplus: Automate Anything! From Underwriting to Servicing
- Tuesday at 1:30, in Session 571 Portal Power: Empower Your Independent Agents & Effectively Compete with Direct Channels;
- Tuesday at 3:30, Session 672 Around the Horn: Insurance Analysts Debate.
Karlyn Carnahan will be presenting on Monday at 3:30, in Session 273: Customer-Centric Claims Service Through Innovative Technology.
Martina Conlon will be presenting Tuesday at 1:30, in Session 572 Uncrossing the Lines: Developing an Enterprise-Wide Application Strategy.
Steven Kaye will be presenting on Tuesday at 1:30 in Session 574: The State of Data Security in Insurance.
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