Category Archives: Insurance

CIO Checklist: IT Security Planning

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Tom Benton

Late last week the news broke that NSA has been working with US Information giants like Google, Verizon and others to monitor and analyze communications under the Protect America Act. The news set off a wave of responses, from privacy concerns to humorous posts on twitter. The PRISM program can be viewed on the positive side as a big data solution for finding and tracking threats to US security; on the negative side, it could be seen as an invasion of privacy. Whatever one’s view on the issues involved, the news may have people in your organization asking questions about IT security.

CIOs should be prepared to respond to questions from the CEO, Board, and business peers about how data security is handled in their companies. Now is a good time to have a discussion with whoever owns data security – whether that’s a Chief Information Security Officer on your team or someone else in the organization. If you don’t have a single owner for data security, then it’s you. When were your data security policies last reviewed? Does your website give customers information on how their data will be protected? Have you had third party security experts review your data security in the last year? Know the answers, because this could be a time where someone asks them and expects you to know.

With help from my teammate and fellow former CIO Rob McIsaac, I have published a CIO Checklist for IT Security planning. This executive brief provides an overview of IT security areas that CIOs need to consider as part of an overall IT risk management framework in their organization. While not intended to be a comprehensive planning guide or to give specific IT security advice, this guide will help CIOs gain traction on developing and reviewing their organization’s IT security plan.

Data security, privacy and how we communicate them is important in establishing trust. For the insurance CIO, maybe PRISM should stand for “Priority:  Review Information Security Measures”, so that you are better prepared to answer questions and build the trust of those who use our data systems.

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My Highlights from IASA 2013

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Tom Benton

I just returned from the IASA Annual Meeting at National Harbor near Washington, DC.  The conference was well attended, and Novarica was well represented by Martina and Chad at sessions on Monday and Tuesday, as well as staff at our booth and analyst meetings with various software vendors.
Here are some of my highlights from IASA 2013:
  • 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.
In all, I, along with my Novarica teammates, left IASA with many new ideas and better knowledge of what is happening with insurance IT solutions.  If you would like to talk about these ideas, please contact me… and look for me next year at IASA 2014 in Indianapolis!
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Underwriting Evolution and Revolution

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Matthew Josefowicz

My new INNsights column, Underwriting Evolution and Revolution, is now available in the INN digital issue.

In the article, I discuss some of the evolutionary changes that have occurred in insurance underwriting over the last few years, while of course keeping in mind William Gibson’s dictum that “The future is already here, it’s just not evenly distributed.”

But I also look forward to the potential impact of a completely re-invented underwriting process based on ubiquitous third-party data and powerful analytics:

The industry today is poised on one side of the Innovator’s Dilemma. No established company wants to
risk the transition costs. But it is quite possible that a highly-funded new entrant could disrupt major
portions of the market by introducing a process that is significantly faster and cheaper than even the
most technologically-streamlined current underwriting process, through extensive use of third-party
data and sophisticated analytics.

No one knows exactly when this revolution is coming, but the early indicators are visible today. While
the regulatory and cultural inertia of the industry will protect it from change for a while, this will not last
forever. Insurers must carefully consider their short-term strategies and the pace of change that’s
appropriate for their organizations, but must also recognize that a massive shift is approaching over the
next decade.

For the full column, see the INN digital issue.

PS: Kathy Burger from I&T has a great article on my expanded comments on this topic from a recent event in NYC.

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My IASA Pre-conference Checklist

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Tom Benton

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

Though the venue is not as widespread as some others, you will want to be comfortable. To get familiar with the National Harbor and the Gaylord Hotel, take a look at  http://nationalharbor.com/ or  http://www.marriott.com/hotels/travel/wasgn-gaylord-national/Plan your days – it helps to take a few minutes to look through the sessions and plan what you would like to see. The program is available at the IASA website  http://www.iasa.org/Members/Content/NavigationMenu/2013AnnualConference1/default.htm.

Make sure to check out the Novarica presentations

Martina is leading a session on “Modern Data Conversion Strategies for Policy Migration and More” (Monday at 1:30pm) and she is on a panel discussing ”Mobile Technology & Automation Power Underwriting on the Move” (Tuesday at 11:00am).  Chad is on a panel entitled  “Cloud Success Roadmap – How to Implement Quickly & Demonstrate Tangible Value while Minimizing Risk” (Monday at 3:30pm) and he is involved in the session “Around the Horn: Insurance Analysts Debate” (Tuesday at 3:30pm).

Plan your nights

Although this will be my first IASA event, I’m told that IASA is legendary for having great evening events, mostly sponsored by vendors.  It’s a little late to get invitations for some events (shameless plead:  I&T, please find a way to squeeze me into your Nationals-Phillies game event!), but you should contact vendors you know especially if you are a customer, and watch for event announcements via email and at the event.

Ping your contacts

Get in touch with folks you would like to meet at the conference.  This is an opportunity to see folks face-to-face that you don’t get to see often. Make sure to put some time in your schedule to socialize and meet new contacts.

Plan some extra time to see some of the DC area

It’s a great time to visit DC.  As a DC area native for many years, I always enjoy late spring/early summer visits to the downtown museums and attractions.  It’s a time where summer tourists are not yet crowding the attractions, and it should be cool enough for walking comfortably in the Mall area.  The Smithsonian Institute Museums (http://www.si.edu/) are a favorite, along with the many monuments (my favorite is sitting on the steps of the Lincoln Memorial looking out toward the WWII memorial, Washington Monument and Capitol building).  The Gaylord runs a shuttle service to the Old Post Office (best stop for the Mall) and Union Station (good for their food court and shopping – and easy access to Metro (http://www.wmata.com/).  There is also a water shuttle that can take you to Alexandria – across the Potomac river from the Gaylord (http://www.marriott.com/hotel-info/wasgn-gaylord-national-resort-and-convention-center/gaylord-national-entertainment/fr8e90c/transportation.mi).

Finally, be sure to stop by Novarica’s booth at the Business Show – we are at booth 739, near the big IASA booth in the middle of the floor.  I plan to be there for some of the afternoon on Monday – stop by and say hello!
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New Report: Business and Technology Trends: Individual Life Insurers

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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 rmcisaac@novarica.com or me at tbenton@novarica.com.

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Evolution and Revolution in Insurance

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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.

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New Report: Email Archiving and Compliance

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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.

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Research Council: Getting a Seat at the C-Suite Table

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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.

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Research Council: CIOs Finding Value in Membership

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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.

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Cat Modeling: Bad Weather is the New Normal

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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.

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