Making a Project Succeed with Users Who are Reluctant to Adopt a New System

Jeff Goldberg

When planning for change management or a core system replacement, we focus a lot on getting buy-in and sponsorship from leadership. But even though end-users may be required to go along, getting their support is critical to success. So how do you handle it when the users of a system are reluctant or even openly resistant to change?

1. Get input and review from key users before the project begins. Make them feel some ownership and buy-in, even if they aren’t part of the decision making process. Include them in updates as the project proceeds so that they have time to prepare and, hopefully, get excited. Remember that time spent in up front education not only helps get reluctant users involved, it also reduces training time at the end.

2. Plan for proper training that includes not just how to use the project, but also what the values of using it are. If you can’t articulate the values before the project begins then something is wrong.

3. Implement a plan to push still-reluctant users. Have dates for shutting off replaced systems, metrics to track how people are using it, and firm incentives (both positive and negative) for adopting the system.

4. Especially with data and BI, never forget that usability and design matters when getting users to adopt a new system. Integrate the new system into the existing daily process. Make it easy to use. Design isn’t an afterthought, it’s a key component of driving adoption and avoiding support request and mistakes.

As always I welcome your feedback. If you have any questions or comments, please feel free to send me a note at email.

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The future just keeps getting closer…

Matthew Josefowicz

In case you were wondering when the great disrupters in Silicon Valley would turn their attention to the insurance industry, wonder no longer, and read this post on the Andreesen Horowitz site from 1/22/15.

How about an insurance company that empowers you to make smart lifestyle decisions? Examples: the car insurance company that routes you around dangerous intersections; the home insurance company that automatically summons a plumber when it detects water on the floor near the water heater; or the health insurance company that connects you with friends that are also trying to lose weight?

By encouraging us to keep safe, insurance companies can keep their payouts low. And we all bask in the glow of an insurance company that has our best interests at heart — because even though our interests are really aligned, it doesn’t always feel that way

Combined with the recent news about Google’s recent moves in auto insurance, it’s pretty clear that tech is starting to smell blood in insurance.

The barbarians are coming. Insurers need to suit up.

The barbarians don’t care about tradition, or the way it used to be, or what yesterday’s customer’s liked. They see only need and opportunity. Insurers need to adopt this mindset quickly.

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Enterprise Data Initiatives Now Taking Center Stage as Insurers Look to Improve their Digital and Analytical Capabilities

Mitch Wein

With insurance carriers of all sizes and lines of business focusing on improving their digital and analytical capabilities to meet customer expectations, the importance of enterprise data has never been greater.

Over the last 3-5 years data has once again become a key focus of the insurance industry. Data is now seen as a key enabler of the insurance industry’s evolution into a fully digitized provider of risk services focused on customer, not product.

When data is collected from either internal or external sources, the CIO becomes responsible for its storage, management and use. This becomes highly complex in today’s world since data is both structured and unstructured and is controlled by various legal and regulatory considerations, as well as internal security and risk policies. Based on the direct experience of Novarica’s senior team and its Council members, the following best practices should be considered when initiating an MDM initiative.

  • Create policies around data and how the data should be managed and controlled.
  • Establish organizational structure for data.
  • Link MDM architecture to business goals and objectives.
  • Consider supplementing internal data in an MDM infrastructure with enriched data and external big data
  • Determine what system or process creates the official data of record.
  • Determine the senior level project sponsor and who pays.
  • Deploy multi-year MDM programs in an incremental fashion.

MDM is more than a technology. It is a program of work involving an assessment of business needs, a data sourcing strategy, a data cleansing strategy to address quality, an architecture and integration initiative, data documentation and classification, as well as an organizational evolution for data governance and ownership. The goal is to create a single view of the master data which can then be referenced by all systems, reporting, and business processes.

Novarica’s experience has shown that the data governance and ownership dimension is often the hardest aspect of this program after identifying a business sponsor and developing a solid business case. Who manages the data, who owns the data, and who is ultimately accountable are difficult challenges that must be addressed.

If your organization is in the process of implementing an MDM program or if your efforts have stalled, please send me an email to set up a complimentary 30 minute consultation.

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  • Vendor Selection Best Practices for Insurance Carriers

    Martina Conlon

    Over the last few years more and more insurance carriers have forgone custom software development projects and turned to the vendor marketplace to find solutions to their most pressing problems. While there are many advantages to leveraging vendor solutions, many insurance IT departments are not experienced in finding and evaluating solution providers to meet their needs.

    The traditional methods used by insurance carriers for selecting vendors can limit success and take an inordinate amount of time, leading to challenges long before a project even begins. By focusing on asking the right questions and engaging business leaders and users early in the process, insurers can streamline the traditional process while providing far better results. Below I have highlighted a few vendor selection best practices, including:

    • Get business commitment to the process upfront.
    • Limit purchasing/sourcing departments control until the contract negotiation stage.
    • Focus on strategic needs rather than current practices.
    • Use a simplified RFI that is easy for the vendor to complete and for you to score.
    • Set the agenda of demos and evaluation meetings, rather than letting the vendor drive.
    • Focus on where your organizations is unique, don’t over analyze the ordinary.
    • Question vendor pricing models and negotiate for what you think is a fair partnership deal.

    The best practices above are a sampling of the lessons learned during years of Novarica vendor selection projects and conversations with experienced CIOs. For more information about vendor selection best practices, register for our upcoming Vendor Selection Best Practices webinar taking place Thursday, January 29th at 2 P.M. (ET) or contact me via email.

    The Usage-Based Insurance (UBI) Short Cut: Developing a usage-based insurance program has now gotten easier

    Thuy Osman

    I’ve been following telematics in insurance since 2012 and the main thing I’ve noticed is that the application of telematics by insurers moves at a sluggish pace. While telematics service providers continually improve their platforms and services, offering insurers multiple ways to collect data (connected car, OBD plug in, mobile app), numerous data points to analyze (speed, braking, cornering, road type, etc.), and various applications for the analyzed data (from underwriting to claims), many insurers are still stuck in the initial phase of designing and developing a UBI program.

    Aside from the issue of patents, the concern I hear most from carriers who are in the process of developing a UBI program is the data approach. Deciding on what data to collect, how to collect the data, and how to store and analyze the data is a huge obstacle. The main point of the data process is to arrive at some sort of driver risk score. Instead of throwing time and resources to come up with that score, carriers can now partner with an external analytics vendor who will collect, analyze and synthesize the data into a risk score that can then be used by underwriters to determine eligibility for discounts or rewards.

    Partnering with an analytics vendor and using their program, such as Verisk Telematics Safety Scoring program (which, it was recently announced, is now approved in 41 states), essentially allow carriers to skip over the data process and jump straight to developing insurance products based on risk scores. Sure, carriers will still have to determine which driving behaviors constitute risk to their company. But, checking off the behaviors on a list for the analytics provider is far more efficient than planning out the hardware to collect the data, storing the data, and in particular, wading through pools of data to make some sense of it all.

    A few years ago at a summit for telematics in insurance, the presenters were talking about the possibility of deriving a driver risk score from the telematics data collected from a vehicle. At that time, only a small number of vendors had large enough data sets that could be representative of a segment of the customer driver pool. Today, analytics vendors and telematics service providers alike have collected enough miles and other driving data to develop an algorithm (however simple or complex) to calculate a driver risk score. In fact, providing carriers with a driver score is one of the standard services a TSP provides.

    For carriers who are looking to develop a UBI program, or even for carriers who are already entrenched in this process, partnering with an external vendor can save time and decrease the risk involved in launching such a program. As carriers see the benefit in this partnership and as they begin to outsource more to the data process to the data experts, maybe the application of telematics in insurance will pick up.

    If you’re interested in discussing this topic further, please contact me at email to arrange a call.

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  • Digital Failings

    Rob McIsaac

    We live in a brave new world now with digital devices and equipment surrounding us in a sea of capabilities that (generally) improve the quality of our experiences. They also allow us to extend ourselves in ways that would have been hard to contemplate until recently. While this has many great potential benefits, there are also some unintended consequences that we need to be mindful of, particularly as technologists. In a world that reflects the Internet of Things, smart buildings and self-driving cars are no longer future state fiction. They are modern realities that have real world implications associate with them when they work. And when they don’t!

    I was reminded of this in a recent analog world event. After restoring my Dad’s 35 year old Moto-Guzzi motorcycle, I’ve come to enjoy quiet country road excursions. Not long ago, while on a pleasant cruise I felt a little “hitch in the giddyup”. Was it real or my imagination? What I found was an analog failure in the ignition system. It entertained me with a gradual failing through diminished capability but provided plenty of time to return to the shop and get a replacement part. The failure was gradual, graceful, moderately elegant and easily controlled. Good thing too, since there is no backup system. The only path forward is the happy one.

    Which got me thinking about how different circumstances are in our digital world. Things work right up to the point when they don’t. One minute they can be fine and the next it is like someone flipped a switch. Lights out. One of my more exciting CIO moments was caused by such a failure. Our online portal was a composite of capabilities, some of which we owned and hosted, other served to us from trusted vendors. When it all worked, it was a thing of technical beauty. We had architected things on our end carefully too, with redundancy and failover capabilities embedded and tested.

    It turned out, however, that some of our third party solutions had taken a less robust approach which we did not fully appreciate. And so, when they went down … they took us with them. Like running into a wall. To our customers trying to argue that we were up and it was actually a third party problem that was keeping them from reaching the functionality they wanted was a moot point. It was our site with our logo; don’t try and deflect! Own it, love it, fix it was really all that mattered.

    All of which made us realize how important it is to plan a digital playbook that anticipates the non-happy path moments and can support nearly instantaneous cutover to a path less traveled. Digital advances are truly remarkable … but they require a different sort of planning when failure can be both instantaneous and catastrophic. A self-driving car that can fail like that would require some serious discussion about liability insurance and advanced training for an operator.

    New capabilities and new opportunities require new planning and architectural paradigms that must evolve concurrently. A digital framework constructed around analog ideas of what failure will look like will, almost certainly, lead to unfortunate results.

    As always I welcome your feedback. To send me a note or set up a complimentary 1 hour consultation, contact me via email.

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    The Future is Here, it’s Just Not Evenly Distributed

    Matthew Josefowicz

    The WSJ today reports that Google has secured insurance agent licenses in 26 states and deepened its relationship with CoverHound. Yesterday, Accenture released a study of independent agents showing disintermediation by online distribution was their number one fear.

    On Tuesday, January 13th at 2 p.m. (EST) we’ll be presenting a webinar on Hot Topics for 2015 for insurer CIOs based on surveys of our Research Council members. With customer expectations changing across the industry, driven by changes in the technology ecosystem within the industry and across the economy, insurers need to plan to incorporate these paradigm shifts into their business and technology strategies for 2015. Or else plan to be taken by surprise.

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    2015 Tech Trends: Thoughts for Insurance CIOs

    Tom Benton

    As I was preparing a blog post on technology trends for 2015, I came across Chris McMahon’s article in INN, “Top 5 Tech Trends for 2015”. The five he chose were: core systems modernization, analytics, mobile computing, the Internet of Things and the digital customer experience. These are certainly great choices, so here are some further thoughts on these trends and their impact on the insurance CIO.

    Core Systems
    As mentioned in the article, interest in core system modernization remains strong for 2015. A survey of Novarica’s Research Council members last year (with results presented for both P&C and LHA insurers) found that the trend is toward faster deployments via SaaS or hosted solutions using an iterative deployment approach. Vendors are developing track records of implementation completion and are finding ways to reduce the risks of these large implementations. CIOs who are considering core system replacements should get an update on potential vendors and their current offerings, and Novarica’s latest Market Navigator reports will be available in February for LHA and P&C policy admin system vendors. 2015 may be the year to consider a replacement and prepare using lessons learned from previous successful implementations at other insurers.

    Analytics continues to be a hot area of discussion at insurers. Novarica’s report “Big Data Technologies for Insurers” notes that insurers should focus on the need first, based on business demands and strategy, before investing in specific technologies. While there have been some initial uses of big data for analytics at insurance carriers, few have integrated analytics into core insurance processes like underwriting and claims. Insurance CIOs should work with business leaders to define a strategy and the “big questions” that need to be answered by improved analytics capabilities.

    Mobile Computing
    Novarica’s report on “US Insurer IT Budgets and Projects 2015” noted that mobile technology is still considered an “emerging technology” area at many carriers. Insurers are struggling to leverage the “3 C’s” of mobile technology (convenience, camera and coordinates) to provide better engagement with producers and customers. CIOs need to look beyond specific mobile strategy to consider flexibility of their systems for the next wave of mobile technologies, including wearable and Internet of Things, along with the analytic capabilities needed to leverage the data these systems will generate.

    Internet of Things
    Just as 2014 was the year of wearables as a consumer focus, 2015 promises to be the year of Internet of Things, including connected home products, drones and smart devices. The key for CIOs is considering what data from these devices can be leveraged for improved insurance products and operations. Information governance will be a key capability for 2015 and into the future.

    Digital Customer Experience
    Interest in engaging customers through digital technologies is driving insurers to reconsider their customer engagement and digital strategies. Novarica’s report “Preparing for Digital Transformation” provides a checklist that includes reviewing current capabilities, strengthening project prioritization and other best practices, and adopting an appropriate culture for transformation. Many customer-focused organizations outside of the insurance industry are creating Chief Digital Officer (CDO) roles to lead these efforts. In essence this move is to provide a focus for meeting the demand for improved customer engagement using technology tools. CIOs should consider taking the lead in efforts that a CDO role would address – CIOs with a good track record of meeting business needs through effective technology deployment should be in good position to do so.

    These five technology trends provide a good starting point for discussing your IT strategy for 2015. As always I welcome your feedback. To send me a note or set up a complimentary 1 hour consultation, contact me via email.

    Mitigation versus Prevention: Three Questions Insurers Must Answer In Order to Evolve in a IoT and Big Data World

    Jeff Goldberg

    The insurance industry is only just beginning to deal with a host of emerging technologies, including Big Data, the Internet of Things (IoT), and a vast wealth of sensor data such as automotive telematics, smart watches, and fitness trackers. In 2015 it’s likely that the industry as a whole will take some small steps (and maybe a few big ones) towards capturing this plethora of data and applying it towards better underwriting decisions and risk management. But there’s more at stake than just incremental improvements to the existing business model.

    There are three key questions that need to be answered in order to move towards fundamental change:

    1. Will insurers be able to develop the technology (Big Data or otherwise) to capture and use this growing amount of customer data?
    2. Even if insurers can build this technology, will customers be willing to share their growing streams of personal data with insurers?
    3. How can insurers use this customer data to do more than just update their current process?

    For the most part, the industry has been fixated on the first question. Insurers have been experimenting with Big Data technologies and looking into hiring Hadoop experts, and while there are a few examples of big impact projects, the majority of insurers haven’t made much headway. Doing more with traditional data technologies has been sufficient, partially because–despite all the hype–the bulk of the business is still dealing with “small data.” Everyone knows about how some auto insurers gather vehicle driving data from participating customers, but outside of personal auto examples are rare.

    But what happens when all new vehicles in the marketplace capture driving data, not just those where customers have plugged in insurer-provided dongles? And what happens when a maturing IoT means that all customer homes are gathering data about safety and security? And what about when a significant percentage of people are wearing devices that monitor their health and well being?

    This leads us to the second question: Will insurers even be able to get access to this data?

    Right now many consumers seem to be willing to share personal data with a host of third party companies in return for convenience and cool features. But will consumers be as open to sharing this data with their insurance company? Many fear that their data will be used against them, resulting in higher rates or cancelled policies. That’s a hurdle the industry needs to overcome.

    In terms of true goal alignment, the insurance industry is actually much better positioned than many tech companies that currently control so much of the current personal data flow. The main goal of these tech companies is to use personal data to monetize the consumer. Companies like Google and many other less-trustworthy third parties want access to the customer’s data in order to properly position advertisements. Companies like Apple and high tech device makers want access to the customer’s data in order to sell them ever more gadgets. But insurance companies want access to the customer’s data to manage a customer’s risk, not to advertise or continually sell more to them.

    But how does an insurer convince a consumer that they will use their data to help them rather than to sell or advertise to them? With automotive telematics we’ve learned that the first step is monetary: provide discounts. But the second step is making use of that data for more than just underwriting and risk management.

    This brings us to the third question: How can insurers use this customer data to do more than just update their current process?

    As the amount of real-time customer data expands and an insurer’s ability to process and understand that data grows, insurers will find themselves able to make informed insights about a customer earlier in the process. Instead of responding to a burst pipe after a winter freeze, an insurer monitoring home sensors will be able to alert a customer before weather damage occurs, saving both the customer and the insurer time and money. Instead of paying claims after an auto accident, an insurer will be able to make recommendations to a customer about patterns that will help them avoid accidents altogether. A workers comp insurer tracking RFID badges will be able to help reduce worksite mishaps and liability.

    Insurers will be in the unique position of looking out for the customer’s well being, helping to prevent accidents, theft, and loss. Unlike most industries, the insurer wants exactly what the consumer wants, and both are happier when claims never need to be filed.

    While some insurance companies might lead this charge, it’s unlikely that all insurers will develop the technology to capture and analyze the full range of data. Instead, third party companies will probably emerge that serve as consumer data hubs and begin to monitor and make suggestions to their clients. Insurers who don’t build this technology themselves will have the opportunity to partner with these third party companies, offering discounts and possibly covering the cost of the services for their customers.

    The new year is a good time for thinking about longer term change. As multiple technologies converge, insurers should be planning for their role to evolve, migrating from one of just risk mitigation to include risk prevention as well.

    As always I welcome your feedback. To send me a note or set up a complimentary 1 hour consultation, contact me via email.

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  • NYT: Insurance Fails to Meet Evolving Needs, Tech Transformation Means Embracing Failure

    Matthew Josefowicz

    I came across two interesting articles in the NYT recently that I wanted to share with our Council members and clients, since they nicely illustrate some of the themes of change and adaptability that have been some prominent in our recent discussions.

    The first, The Insurance Market Mystifies an AirBnB Host describes the challenges that a homeowner had trying to secure coverage that would allow her to operate as an AirBnB host. As the Times sees it,

    …this is mostly the fault of the insurance industry, which doesn’t always want to answer questions about this sort of activity, whose agents aren’t always as knowledgeable as they should be and whose own policy language can be incredibly confusing.

    Whether or not you feel this is fair, or however you feel about the emergence of the “sharing” economy and its attendant risks, the article makes an important point. There are consumers out there who want to manage their risks, and the insurance industry is not helping them. Stuck in old definitions of personal v. commercial, and old product and distribution models, the insurance industry is missing this opportunity to be more demand-led.

    The other article was actually from a few weeks ago. Called Welcome to the Failure Age, the article uses a story about the rapid turnover of innovation enterprises in Silicon Valley to make a larger point about the increased rate of failure that goes along with the increased rate of innovation. While many insurers have proclaimed themselves dedicated to innovation (Novarica research shows that more than 1/3 of large P&C cos now tie innovation to executive comp), few insurers have developed the institutional tolerance for failure that goes along with innovation.
    The article also talks about the way that information technology advances are changing the nature of corporations themselves:

    Corporations “were created to coordinate and organize communication among lots of different people,” says Chris Dixon, a partner at the venture-capital firm Andreessen Horowitz. “A lot of those organizations are being replaced by computer networks….If you had to know one thing that will explain the next 20 years, that’s the key idea: We are moving toward a period of decentralization.”

    This is an incredible challenge for companies in every industry, not just insurance. The central problem of the corporation, of coordinating the work and capital of thousands of individuals, is changing.
    The article closes with this thought:

    We are a strange species, at once risk-averse and thrill-seeking, terrified of failure but eager for new adventure. If we discover ways to share those risks and those rewards, then we could conceivably arrive somewhere better.

    In my mind, this is a hopeful thought for the insurance industry. Currently, there’s no set of institutions better positioned to manage risk. But the way the industry manages risk in the future will not look like the past.

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