Document Creation and Customer Communication Management (CCM)

Sarah Bogan

Our new report looks at document creation/CCM vendors. While the document capabilities of core systems like policy administration and claims haven’t advanced much recently, document creation solution vendors have been investing in their core solutions to make them more intuitive and easier to use by adding better approval workflows and supporting more customer communication functionality, including better multichannel support. In addition, vendors who have historically focused more on document creation solutions or print processing offerings are expanding their footprint to include a more holistic CCM approach, focusing more enterprise-oriented customer experience. Cloud-based options are also proliferating.

The vendors and their offerings are as unique as the carriers and their needs. Our new Novarica Market Navigator, US Document Creation/CCM Systems can help insurers navigate the document creation / CCM vendor landscape. It captures vendor demographics, technology, solutions components, vendor service offerings and typical implementation approaches as described by the vendor.

Project End Zone: Business and Tech Trends in Workers’ Compensation

Karlyn Carnahan

Years ago, a carrier I worked for launched a project called Project End Zone whose goal was to move Workers’ Compensation into the profit zone. That project could easily be initiated at many carriers today as the Workers’ Compensation combined ratio has been above 110 for several years now according to AM Best.

Today, with premiums starting to recover and rates increasing 9 quarters in a row, carriers are continuing their efforts to grow their books of business while driving down the loss ratio and doing that in a way that delivers operational efficiency. Most carriers are moving down multiple paths. Investing in agent portals continues to be a high priority to drive ease of doing business and enable multiple channels. Policy administration system replacement is becoming more important to WC carriers in order to enable straight through processing of small policies. Claims administration system replacement continues to be a high priority to assure consistency in claims handling. And analytics, especially predictive modeling, is becoming a critical enabler for WC carriers.

While these are the highest priority initiatives, WC carriers are investing in a wide variety of other initiatives. Whether CRM solutions, Pay-As-You-Go, or enabling mobile a wide variety of creative initiatives are in progress and more are planned for 2014.

You can read more about the latest business and technology trends in my most recent report Business and Technology Trends: Workers’ Compensation.

New Report: Policy Administration System Lessons Learned

Tom Benton

I recently completed a report based on some interesting recent discussions with IT leaders about PAS implementations. Specifically, I talked with several CIOs from Novarica’s Research Council who consider their implementations to have been successful.

Five key lessons learned emerged, mainly related to communication and governance best practices. The report discusses these five topics and provides some insight from a few of the leaders who turned around troubled implementation projects.

Policy Administration System Lessons Learned is available today. Please contact me at tbenton@novarica.com if you would like to discuss the report, or if you need insight on preparing for a PAS implementation at your organization.

My Highlights from IASA 2013

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!

Importance of Communication on Core System Replacement Projects

Tom Benton

In my recent discussions with various insurance IT leaders, communication issues are becoming a common thread in lessons learned during core system replacement projects.  This reminded me of a Harvard Business Review blog post I read recently.  The post suggests that communication is an issue that has been of concern for a long time.

The author (Scott Edinger, founder of Edinger Consulting Group) presents three critical elements of communication first proposed by Aristotle, the Greek philosopher who studied under Plato and was teacher to Alexander the Great, a leader who undoubtedly dealt with communication issues on his projects.  The three elements of ethos (credibility), pathos (emotional connection) and logos (reason, or logic) are all important to communicating your message effectively as a leader.  Your team needs to believe what you are saying, connect with it and understand how you came to your conclusions.  The post notes that while all three elements are needed to communicate  effectively, leaders can become better communicators by improving in any of the three.

From my discussions on core system replacement projects, IT leaders believe that improvement in communication will increase the likelihood of success on these projects.  As one Novarica IT Research Council member noted, project leaders need to communicate “early and often” for project teams to successfully meet the challenges of these large, high risk projects.

ACORD/LOMA Forum 2013: Novarica on Growth, Modernization, and IT Impact

Matthew Josefowicz

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)
Rob McIsaac participates in a panel with Genworth, ESRA, and Warwick on e-Signatures benefits and challenges.

 

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.

Business and Technology Trends: Workers’ Comp and Commercial Lines

Karlyn Carnahan

For the latest in our series of Business and Technology Trend reports, I looked at the top issues for Commercial Lines and Workers’ Comp, and offered an overview of and data on their respective markets and examples of recent technology investments by insurers.

Both commercial lines and workers’ comp carriers are looking to invest more in agent portals, data analytics, and core systems replacement. Specifically, commercial lines carriers are focusing on expense reduction, growth strategies, and improving underwriting results, as they see pricing continue to firm up. As a result, we are seeing them consider issues including business intelligence (particularly predictive analytics, for those who have sufficient data), policy administration upgrades to improve product development flexibility, claims administration system upgrades, and agent and policyholder portals that extend functionality to both parties.

Workers’ comp carriers, on the other hand, are dealing with competitive and regulatory pressures that are leading to a strong interest in data and efficiency. Like commercial lines carriers, their top initiatives include extending portal functionality to the agents and policyholders, upgrading claims administration systems, and policy administration system upgrades to improve risk selection and pricing, and to reduce operating expenses. They are also interested in business intelligence and predictive analytics tools.

A free preview of the Commercial Lines report is available online here, and a preview of the Workers’ Comp report is available here.

New Novarica Reports Help P/C and L/H/A Insurers Navigate a Market of 80+ Vendors

Chad Hersh

I’m thrilled to announce the publication of the most recent update to our Novarica Market Navigator reports on P/C and L/H/A policy administration systems. We looked at over 80 vendors for these studies, including 58 P/C solutions and 25 L/H/A solutions—by far the most comprehensive look we’ve taken at those markets to date. The resulting profiles are designed to help insurers navigate a marketplace that’s becoming only more complex.

With a third of insurers indicating that they are currently replacing or planning to replace a policy administration system, these reports couldn’t be timelier. In fact, more P/C and L/H/A carriers view PAS replacement as a top priority project than any other type of project. Many insurers learned—the hard way—that product agility and speed to market aren’t just buzzwords, but can make a world of different when trying to quickly enter or exit a line of business or product.

And with many project administration systems now being offered on non-legacy platforms, particularly for P/C, figuring out which solution to use has grown increasingly difficult for insurers. This report can provide carriers with valuable insights on where to start with their searches.

Meeting and exceeding expectations for agents, brokers, and customers requires changes to most carriers’ core systems, and we’re seeing that manifested in the surge of interest in policy administration systems and in the functionality provided by the systems. The other business drivers for core systems replacement—speed to market, product agility, internal workflow optimization, and data accessibility—continue to be key decision factors as well.


Click here to read a preview of US Property/Casualty Policy Administration Solutions 2012(Q2)
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Click here to read a preview of US Life/Annuity/Health Policy Administration Solutions 2012(Q2).

Do PAS Projects Pay Off for P&C Insurers?

Chad Hersh

Core policy administration replacement is one of the highest priority projects among P&C insurers. Nearly every one of those insurers has the same questions: how does our project (or potential project) compare to those of our peers? Are we spending too much? What results can we expect to gain? What has been the experience of others who’ve taken this step?

To answer those questions, Novarica partner Matthew Josefowicz and I looked at core policy administration projects completed by 37 P&C insurers over the past 10 years. The resulting report outlines project impacts, average resource utilization, costs, and timeframes, and discusses major challenges faced and overcome.

The full report details a number of key findings, notable among them the fact that the vast majority of PAS projects have been replacements for one or more existing systems, rather than projects where a new system is added to support a new line of business. And unsurprisingly, P&C insurers are spending on projects that support their biggest books of business.

But the question remains: is an investment in a PAS project worth it? The answer, it seems, is yes: the majority of insurers cited 25% or greater improvement in speed to market, data accessibility, and technology risk as a result of their projects—three key drivers for P&C insurers as they work to modernize their systems.

To see how your PAS project spending stacks up, click here to read Novarica’s full report, US P/C Policy Administration Projects: Averages and Metrics.

Product Agility an Emerging Incentive for L&A Core System Modernization

Chad Hersh

I had another great conversation with Insurance & Technology’s Anthony O’Donnell today, this time to discuss where L&A carriers rank speed to market among their needs in core system modernization projects. As I explained to Anthony, core system replacement is being driven by a number of needs, including speed to market, data transparency, and better distributor and customer self-service.

But while vendor marketing messages and many pundits continue to (correctly) point out the need for speed to market, another critical need has emerged: product agility. Speed to market implies the need to get a product to market quickly, but product agility is the ability to add any new product to the system–whether the admin system supports it today or not. Many carriers seeking to add a long-term care rider to an annuity have to wait for vendors to improve their systems; think Medicare Supp or Medicare Part D as examples of healthcare legislation driving rapid product introduction needs, and look out a year or two at the huge potential changes.

To read Anthony’s full story on L&A insurers’ need for speed and agility in core system modernization, click here.