Matthew Josefowicz
More than 30 insurer CIO members of the Novarica Insurance Technology Research Council gathered at the Omni Providence yesterday to discuss industry and organizational strategic issues.
The morning opened with a general discussion of technology trends shaping the industry and how insurer CIOs are helping to position their companies to compete in this new environment. Major topics of discussion include evolving channel preferences and customer expectations, as well as the increased use of third-party data in underwriting, and the “shift to the left” of risk selection from underwriting to marketing. Members also discussed the importance of aligning market segment, product offering, and channel strategy, and the necessity of flexible and agile systems to support new developments.
Despite these challenges, IT spending and staffing levels continue to fall within historical norms. Members discussed the findings of recent Council studies on Budgets and Projects for 2013 and Quick IT Benchmarks.
In this challenging environment, optimizing business/IT partnership is more important than ever, and was the next focus of discussion. Members talked about the challenges of driving organizational innovation from within IT, especially in the face of complacency from some business leaders. Some members pointed out the high general correlation of senior business leaders’ age and interest in driving change through IT.
Another key topic of discussion was big data and analytics. Most of the participants agreed that while true “big data” (unprecedented volume, velocity, and variety of data) has yet to impact most insurers, the “big data” hype has re-focused attention on the value of data and analytics in general.
Members are increasing their use of third-party data for pre-fill and speeding the underwriting process by reducing manual data collection.
Members also noted that vended core systems are starting to include more analytical capabilities in traditional transactional and record keeping systems like policy administration systems and claims.
Core systems replacements were another hot topic of conversation, as nearly every member attending had recent completed, was currently planning, or was in the middle of a major core systems replacement project. Members noted the increased need for speed in phasing component-by-component replacement projects and the more limited life-expectancy of modern systems given the accelerated rate of change in both IT and insurance. Members also discussed best practices in managing vendors, and the importance of monitoring configurable systems with the same discipline traditionally applied to code-and-test systems.
Afternoon breakout sections included active discussion of cat-modeling and impact of changing weather patterns on underwriting, as well as discussions of the impact of changing financial and health care regulations.
Our next Council event is the presentation of the 2013 Impact Awards in NYC on August 21. We look forward to seeing our members there as well!
