Three Questions to Ask about Every Analytics Solution in Order to Get Actionable Insight

Jeff Goldberg

I recently joined Novarica as a Principal after a brief hiatus from the insurance industry during which I founded and eventually sold a SaaS data analysis and business intelligence company in the health & wellness space. For most of my career I’ve been thinking about how to best leverage insurance data, and after spending so much time deep in the weeds of designing and selling a data analysis solution, I have a new perspective on actionable analytics and BI.

The idea of “actionable data” has been a minor buzzword for at least a decade, surrounding all of the many advances and evolutions of data projects and services. We all know intuitively what it means: make sure that we can take action from our data. And we all know examples of projects that failed to heed this advice, where after much time and money spent on bringing different data sources together and building reports against it, nothing in the business changed as a result.

But how do you actually get actionable data and what kind of action do we mean? After having spent so much time at a company that provided online business intelligence reporting to clients, is it perhaps surprising that I often don’t like reports? Or, rather, I frequently feel a report is just a stepping stone to a better business process. Clearly there are users, typically at the strategic or executive level, who need to be looking at big pictures and trends. But for most operational users, poorly designed business intelligence acts as a dead end rather than a call to action.

Now whenever I see a report, often with excellent data and filled with tables and charts and graphs, I ask three questions about it:

  1. What is the key take-away from this data, and if it can be distilled down to one or two important facts then why is the whole report even needed?
  2. Can these one or two important facts be worded in the form of an action or a “to-do” list?
  3. Can I get these “to-do” items directly into the hands of the person who needs to do them, either via e-mail or some other process integration?

As an example, my data company had a very popular report showing a manufacturer’s product distribution across retail stores. It contained a lot of trend and sales information at a macro and micro level. For an industry with a lot of middle-men and where manufacturers often don’t know where their own products are being sold, this was a very important report. But when we asked the above three questions, we got the following answers:

  1. The key take-away is a list of the top five or ten stores where a manufacturer’s full product line is not being sold, ordered by how much potential business is being lost.
  2. The action is to call those stores and sell them on carrying the additional products.
  3. The best way to get these actions done it to split them up by region, and have a list of stores to call (with phone numbers and product information) sitting in each sales person’s inbox on Monday morning.

The head of sales and marketing wants to look at the big picture and be able to analyze the data, and for her the original report is still the correct source. But for most users, by answering those three questions, we’ve just taken a potential confusing dead end and turned it into a driver of their ongoing behavior. (And for a startup that relied on a monthly SaaS subscription, getting data integrated directly into a client’s operating process whether or not their employees ever logs into the website was a great way to become invaluable.)

Every report in your business should be put to the same three questions. For example, any time a data analysis solution helps an underwriter make a risk decision it’s the result of taking what was once large reports with multiple tables and lots of data, boiling that down to the key rating, and then putting that rating in front of the underwriter right within their toolset.

To be clear, I’m not anti-report. Sometimes insurers’ services aren’t integrated or modern enough to support this kind of distribution across tools and systems. But if you can answer those three questions about a report, even if the kind of automated distillation and distribution of the data won’t happen for a long time, then you can better train users on how and when to use that report to take the action that makes your business better.

Document Management and ECM – New Novarica Market Navigator Report

Tom Benton

Insurers are showing increasing interest in improving workflow and customer experience.  This often includes providing multiple communication channels, such as mobile texting, social media and video, along with traditional paper and e-mail.  The growing amount of unstructured data from these communications brings challenges for management, storage, workflow and distribution along with leveraging the data for analytics and reporting.

Insurers are finding that legacy document management systems are not able to meet demands for customer experience and workflow initiatives.  Many find that replacement is necessary, and that current document management / ECM (Enterprise Content Management) systems have capabilities that are difficult to add to legacy systems. Updating can also provide opportunities for improved process flow along with new deployment options such as SaaS or hosted ECM solutions.

Novarica has published an updated Market Navigator on Document Management and ECM Systems, available now.  This report presents an overview of the current solution provider marketplace to assist insurers in drawing up their shortlists of potential providers based on vendor market position and offering details.

 

Evolution in London Market Vendor Landscape

Catherine Stagg-Macey

The 325-year-old Lloyd’s market makes changes slowly. The complexity of the risk, the uniqueness of the market place and the importance of relationships are all factors in the speed of change.

However, one area of noticeable change in the last three years is the core solution offerings to Lloyds. Traditionally, a small number vendors serving the local insurers, syndicates and managing agents developed software for each client. These vendors were small in size with management and development staff drawn from the Square mile.

There was significant re-use of the software across clients but the software offered was some way off from being productized. As a result, the clients (insurer, syndicate, managing agent) would be faced with on-going services bill to maintain what is essentially a bespoke core systems implementation. This had the advantage of being significantly fine-tuned to each client’s requirements but at a cost.

The Lloyds vendor market was known for mostly over-promising and under-delivering. CIOs would make comments like “our vendor is the best of a bad lot”. The sector is notorious for difficult and painful implementations. With only one or two new deals a year for vendors, it was a hard market to ensure continued investment in the solutions.

For years, the idiosyncrasies of the Lloyds market (messaging into the Bureau, peculiarities of business process, and complexity of the risk) were significant barriers to entry for other vendors.

Then two trends converged to create a more interesting target sector for the non-traditional London market vendors looking for continued growth:

  1. Mainstream software market matured significantly and insurers were able to partner with vendors with sophisticated partner programs, and strong delivery records to take on some serious legacy system challenges.
  2. Lloyds/London market insurers started to expand globally and were open to looking at more mainstream solutions for their non-Lloyds business. Several made investments in Europe or the US for their regional businesses and successfully implemented new underwriting and claims solutions.

The result is several of the big names in the core P&C systems market now have the global Lloyds or London market insurers as their clients, albeit for their non-Lloyds books of business for underwriting. Implementations are mostly in the US or in Europe.

The Claims area is a different picture. Several vendors have made the necessary investment (with thanks to their charter client) to be London market compliant and support Claims in the Lloyds market. This mostly involves modifications to messaging to be compliant to the London market message standard of ECF.

So the next uncharted territory is for a mainstream vendor to partner with a London market insurer and invest in the localization requirements. Our view is that is probably 18-24 months away.

It’s a good time for the insurer in the London market. There is increasingly more choice from established, well-funded vendors with better implementation track records and experience in product management. It’s a challenging time for the incumbent traditional London market software players as the competition is going to really hot up with these new market entrants. Time to buy ring-side tickets.

New Report: Business Intelligence Solutions for Insurers

Martina Conlon

The continuing hype around “Big Data” is focusing ever more attention on insurers’ data management and BI capabilities. Analysis of data, creation of predictive models, and the ability to take action based on the outcome of those models has always been at the core of the insurance industry. But BI tools and platforms, big data technologies and the availability of data analysts and scientists is spurring interest and adoption even further.

On Friday, Lis Maguda and I published the updated Novarica Market Navigator report on Business Intelligence Solutions for Insurers that profiles the solutions and tools in this space. The report contains a brief profile of each vendor solution: 4Sight Business Intelligence, Cover-All, Guidewire Software, IBM Corporation, InEdge, Information Builders, Innovation Group, InsFocus, Insurity, Microsoft, Policy Administration Solutions, SAP, SAS, SNL iPartners, Tableau Software, and Yodil. Most of the solutions profiled in this report provide insurance-specific models, dashboard, and reports. A few offer industry-agnostic tools to enable the insurer to develop their own custom BI environment, and a few others offer both tools and insurance data models/visualizations. All offer products that can accelerate delivery of a robust BI environment.

Business intelligence continues to be one of the most common areas of investment for insurers. The rising tide of Big Data threatens to overwhelm enterprises that have not yet gotten the most out of “little data” (structured enterprise data). Implementing a comprehensive analytics and business intelligence environment is a major step on the road to data mastery. Many insurers recognize that leveraging internal, external, and big data is the key to improving their business performance, and are investing accordingly. This report can assist insurers in assessing the options for enabling this critical capability.

Just Because You Can

Rob McIsaac

Even though I’ve spent much of my career in and around technology, I’m still frequently amazed at the things we are able to do now. Intuitive user experiences, expansive tools for creating insights and effortless transactional capabilities are all part of the modern experience.

Which makes it seem all the more startling when technology offerings go so horribly wrong. This also created a sort of “what were they thinking?” reaction to a recent release by a top US-based technology company. With some fanfare, I got the release yesterday on a new (and exciting) video conferencing capability. The marketing was engaging; now I’m curious.

This is a business app of course. When I fire it up on my corporate laptop it dutifully engages Internet Explorer after which … nothing happens. I do eventually get a message saying “sorry, we don’t support your browser yet”. Next to arrive is a message offering to install Chrome for me so I can see their new tool. Which, of course, I can’t since this is a locked down corporate machine. All the marketing messages go in the trash, I shake my head over the wasted time … and note to avoid that vendor in the future. What were they thinking?

Of course, that’s the problem. They weren’t thinking. Just because they have a cool technology doesn’t mean they should blindly launch it on the hope that it makes sense to the recipient. The context in which something will be used is critical to understand if the impact a company has on its customers is remotely close to the desired one.

This is, of course, not something unique to technology vendors. Insurance companies need to think long and hard about this as well. It requires that carriers do something that frequently is incredibly difficult: think from the outside in, rather than the inside out.

The “customer” may be either the producing agent, the premium paying customer, or both. Regardless of who it is, understanding how techno guy and messaging will be received in their contextual experience will be key. Some things may be obvious such as the lack of understanding for internal organizational structures and acronyms. Others might be less so, like an appreciation for the nature of the physical equipment they use. Irrespective of these elements, carriers looking to maximize the returns on their investments should make the effort to understand these things before they launch an effort.

Some years ago, while I worked as the CIO for a bank, we “discovered” that many of our customers were suddenly unable to use their bill payment functionality, a pretty critical component in a banking relationship. We quickly traced the problem to the vendor we used for bill pay. They had decided to use some “cool new tech” to enable an upgrade, and then tested it only on their corporate desktops. It apparently worked just fine on versions of IE that were no longer being sold by Microsoft. They never tested it in Firefox, Safari, or current releases of IE which created an impressively painful rollback experience. It also taught us that we needed to really understand end user environments … and that we needed our vendors to do exactly the same thing. We rewrote contracts to assure ourselves that the appropriate testing was going to be done by vendors, including building in provisions the required support for browsers and versions that achieved market share thresholds. In effect, we need for both our own internal IT teams and strategic vendor partners to view the company from that outsider perspective so that we would know precisely what the customer experience would be. Guessing and estimating are not options when you have so few opportunities to make initial impressions and where a prospect or customer can so easily move from one company to another.

This issue is now exacerbated by mobile capabilities that bring with them different form factors, operating systems and interface nuances. Getting it right there is now so important that some companies have moved to a “mobile first” deployment paradigm that would have been hard to imagine until very recently.

Just because a company can do something doesn’t mean they actually should! Thinking through the experiences, as well as the consequences, should be critical to developing a go to market strategy for technology solutions.

You Get What You Pay For–Choose Wisely!

Rob McIsaac

I’m often struck by the notion of getting a “good deal.” What does that mean in practical terms, when we make decisions in our personal and professional lives? Many of us contend with this daily, whether it is in deciding small things (where to have dinner tonight), big things (which car to buy), or things that will have a direct bearing on the direction of our career (so, how much is that policy admin system in the window?). We need to make thoughtful calculations that get us to a better place by balancing risks, rewards, excitement and the fear of the unknown. And we need to do it with speed, given the pace of our experience today. Economic advantages can indeed be fleeting things.

So what is the difference between “cheap” and “value”? In short, they are very different ideas when it comes to making investments. Confusing them can have many dire and long-lasting consequences.

I came to this realization honestly enough. I grew up in a family that laughed about how my grandfather “could squeeze a nickel so hard that the buffalo would cry.” We all got the message: it was a lot easier to spend money than to make it, so have your wits about you when making important financial decisions. Being a smart, well-educated investor makes a huge difference when final outcomes are assessed.

It is that outcome component that is really at the core of the difference between “cheap” and “value.” A low initial price tag may only represent the down payment on what may prove to be a decidedly poor investment. “Cheap” may mask ongoing support costs, issues with operability, or even the viability of the vendor bringing a product to market. If a price appears to be too good to be true, then one of two things is true: either you have supernatural negotiating skills, or there’s something hiding under a thin veneer that needs to be peeled away. I start peeling every time something fails a basic sniff test.

Value gets at a different dynamic. It doesn’t look at the sticker price so much as it does the economic “puts and takes” over a lifetime of use. Understanding what that useful life might be, and how the investment is going to earn out over time, is critical to getting this calculus right.

Some of the worst cars I’ve ever owned were the cheapest to acquire and the most miserable to own. Conversely, I got some of the best value from vehicles that had a higher sticker price, but were more engaging to use day-to-day, based on comparable functionality.

Technical investments work much the same way. To get to a real “value” conversation you really need to understand both the TCO and the usability of the solution concurrently. At a recent ACORD conference, a presenter ruefully noted that we “overvalue what we can measure while undervaluing what we cannot.” This is why value calculations can be such a challenge. Moving forward, we will find ourselves grappling with issues that are difficult to put hard edges on today. On the other hand, presuming that our planning horizons extend beyond next Tuesday, that’s exactly what CIOs and their teams need to do. They need to help business partners bring the future into somewhat clearer focus and facilitate seeing around corners, while helping to quell the systemic noise and determining how finite investment pools can create best value for their carriers.

Value is a much more exciting concept than cheap is. It requires real thought and the ability to demonstrate thought leadership in difficult economic times. The Great Recession may be over, but the competitive environment of the future shows no signs of lightening up. As the budget battles of 2014 start to heat up, it’s a great time to beware of the cheap–and extol the virtues of value.

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!

Insurance M&A Report Updated

We’ve updated our periodic report on M&A in the insurance software sector in response to the latest flurry of activity. Our report includes an updated view on the tech giants, portfolio players, and financial investors in the current marketplace. The two biggest changes since our last report: Guidewire’s successful IPO, which gives new hope to financial investors, and SAP’s acquisition of Camilion, the first acquisition of a vertical ISV by a tech giant since Oracle’s purchase of Skywire and AdminServer in 2008.

SAP/Camilion and Insurity/AQS show importance of ISO capabilities

Karlyn Carnahan

This week saw two major announcements in the insurance technology landscape – Insurity acquired AQS, and SAP acquired Camilion. With the number of players in this space – is this a harbinger of things to come? Not necessarily. Interestingly both of these acquisitions resulted in a significant improvement of ISO capabilities for the acquiring companies.

With more and more insurers leveraging ISO, vendor solutions that provide full support for ISO products will likely increase in popularity. The ability for insurers to quickly and easily extend base ISO products with proprietary product features without coding or help from a vendor could prove to be a significant differentiator for a carrier. Those vendors who enable that speed to market and agility are likely to rise higher on a carrier’s short list of potential options.

More policy administration vendors are working with ISO to identify ways to streamline the process and deliver efficiencies to the carriers but AQS and Camilion were/are clearly leaders in this space. Will AQS and Camilion products continue to be available in partnership with other vendors? Or will the acquirers look at this as a significant competitive advantage that they will retain more tightly.

For other technology vendors, this is clearly a call to continue to develop ISO capabilities. ISO carriers who are looking at new policy administration solutions should be sure to understand the level of ISO support being provided by their vendor. For more information about the impact of managing ISO and some of the choices available, take a look at this report on typical internal processes for ISO circulars.

February New Research Round-Up: Mobile, CIO Best Practices, ACE Rankings

  • Mobile in Insurance Beyond Personal Lines: Current Trend and Expectations. Mobile has spread far beyond personal lines, with significant growth projected for this year and beyond for policyholder and agent/broker capabilities across the industry. Based on a survey of 75+ CIOs.
  • Bring Your Own Device (BYOD) in Insurance. BYOD is growing in insurance, but large and midsize insurers are taking different approaches. Based on a survey of 75+ CIOs.
  • Moving Into Mobile. 3-page interview with Novarica partner Chad Hersh from this month’s Best’s Review on mobile trends in insurance. Clients and non-clients may download the full article for free.
  • Contract Development Planning Checklist. The latest in our CIO best practices checklist series.
  • Novarica ACE (Average Customer Experience) Rankings of 37 insurance software solutions, including solutions from Agencyport, Cincom, ECCA, FirstBest, Guidwire, Hyland Software, Innovation Group, Insuresoft, Intuitive Web Solutions, iPartners, Maximum Processing, MULTICO, Napersoft, NxTech, Oceanwide, OneShield, Optical Image Tech, Perceptive Software, Silanis, StoneRiver, SunGard, Thunderhead, Vertex, and Vertafore.