When it comes to marketing strategy, many insurers are dangerously distant from customer needs, having outsourced the entire customer acquisition and service function to their independent agents. This leaves them without close connections to their market, which can lead in turn to serious miscalculations in product development and service strategy, as well as missed cross-sell opportunities.

Worse, without customer-level data, insurers fail to have a true risk picture. If the same individual has multiple life products or property and liability products, or if the same company is doing business with an insurer across multiple regions and product lines, insurers may not have a true picture of the combined risk in their portfolio.

So while it may be true that insurers may not need to listen to their customers all the time, they should definitely know what they’re saying, or at the very least, who they are.

Unlike a laptop or a phone, an iPad is a good platform for entering short pieces of data or selecting from menus in an interactive form from the field. The screen real estate and text-input option is superior to both a smartphone and a stylus-based tablet, and it doesn’t require resting on a surface like a laptop. Once the camera-enabled versions emerge, both still and video image capture will enable field personnel to incorporate rich data into these forms, including audio signatures from customers or claimants validating information.

Catch my “Ask the Expert” segment from IASA online here.

My latest report, Novarica Market Navigator: US P/C Claims Systems 2010 (Q2), published today, is designed to help insurers rapidly understand their options and prioritize their evaluations. The report is summarized online at http://www.novarica.com/report_pcclaims2010_nmn/

The quality of a carrier’s claims service heavily impacts the customers’ view of the carrier because other than the bill, claims are typically the only contact a customer has with a carrier. And a bad claim experience is one of the top reasons for non-renewal. In today’s competitive environment, where retention is a critical imperative for carriers, claims handling is a major source of competitive advantage for property-casualty companies. Claims administration systems are being replaced at an increasing pace in the insurance industry. While many carriers have already upgraded and others are in the middle of a claim replacement project, a majority of carriers are in the planning phase for a core claims system replacement.

Vendor solutions profiled in the report include: Accenture, Aon eSolutions, BlueWave Technology, Brightwork, CSC Advanced Claims, CSC Exceed Claims, DAVID Corporation, Decision Research Corporation, Exigen, FINEOS, Guidewire, Innovation Group, ISCS, LexisNexis, MajescoMastek, Oracle, Paradox Technology Solutions, P&C Insurance, Ravello Solutions, SAP, StoneRiver Claims Workstation, StoneRiver PowerSuite, Tropics Software Technologies.

First, unlike in the life/annuities market, there has been a ton of innovation in the P/C PAS space, dating back to the early part of this decade. With carriers starting to adopt these solutions in earnest starting in 2004-5, the modern solutions have truly begun to mature and have referenceable client bases, a broad set of supported insurance products, a mix of personal, commercial, and specialty lines functionality, and much more. Further, many solutions have added, are adding, or have partnered for billing, claims and other functionality. These factors have driven adoption up to a strong but very much sustainable level. That, in turn, has created a “keep up with the Joneses” need for insurers to offer functionality and products offered by competitors.

Although there are nearly 60 vendors in the U.S. alone, the market should be able sustain the survival of the many different vendors. Many of the smaller vendors live primarily on maintenance streams and a deal or two every other year. On average, each vendor gets about 2 deals per year, though in reality this number is considerably larger at the top end and zero on the low end.

Generally speaking, each year 2-3 vendors disappear through either acquisition or attrition; however, in their place, 2-3 new vendors crop up. It’s hard to imagine this is sustainable, but for now it seems to be the natural order of things! Those vendors that keep their solutions truly modernized and refreshed–and not just cosmetically speaking, or by rewriting existing systems into a new codebase, for example–have potential to survive, but other critical factors exist. For example, vendors need to have exceptional delivery track records, to be price competitive, and be large enough for carriers to feel comfortable selecting. The trend is that carriers are leaning towards a greater number of components being replaced, but this is occurring in a modular fashion. While sometimes a single vendor is getting the whole enchilada, it’s also not uncommon to see the projects split across several vendors.

This is not as often the case in L/A, since most replacements are either policy only or all-in-one deals; billing-only or claims-only deals are the exception rather than the rule. In the next year or two, we will likely see the Life/Annuities systems market have a strong recovery after several years of near-dormancy. Indeed, we have seen significant shopping that seems to indicate a significant amount of pent-up demand being released. We actually believe the P/C market is in a “steady state,” with a strong 2010 flowing into strong pipelines for top vendors through 2011 and 2012.

Further Reading

• Novarica Market Navigators for PAS: P/C, L/H/A
  
• US Policy Administration Projects: Averages and Metrics: P/C, L/H/A
  
• What Commercial Lines Carriers Expect from a Policy Administration System

I spent most of my time at the CIO Executive Forum. There were some great insights from the panel, including this one on building the maturity of the IT organization: “Be Dependable first, then Efficient, then Proactive, then you can be Influential.” (which echos Don’s report on 10 Essential Elements for Insurer CIOs)

I also had an opportunity to participate in the “Ask the Experts” section of the video newscast.  You can catch me here discussing Mobile in Insurance (at 5m30s) http://www.insurancenetworking.com/video/24946-1.html.

The RAVE Awards recognize solutions whose current customers are enthusiastic about the value these solutions have brought to their organizations. And since the creation of business value is the first and foremost goal of any technology investment, we congratulate the RAVE Award winners and honorable mention recipients on their outstanding achievements!

Back Office
Winner: StoneRiver – PTE Financial
Honorable Mention: SunGard – iWorks EAS

Agency Management System Connectivity
Winner: NxTech ConneXt
Honorable Mention: AgencyPort – AgencyConnect

P&C Agent Portal
Winner: AgencyPort – AgencyPortal
Honorable Mention: CSC – Agency Link

Illustrations
Winner: SunGard – iWorks Navigator Illustrations
Honorable Mention: iPipeline – Illustration Suite

P&C PAS
Winner: Ebix – EbixAdvantage
Honorable Mention: Insuresoft – Diamond System

P&C Claims
Winner: Accenture – Claim Components
Honorable Mention: Guidewire Software – ClaimCenter

Document Management
Winner: OIT – DocFinity
Honorable Mention: Hyland Software – OnBase

Other
Winner: Pilotfish – XCS eiConsole
Honorable Mention: iPartners – Insurance Scorecard

Read more about the 2010 RAVE Awards HERE

Find out more about Novarica’s ACE Rankings HERE

Tuesday, June 8
308 Under the Microscope: How to Survive Increased Reinsurance Audit Scrutiny
9:15am – 10:15am
Panel Members: Becky Roth, MICA; Craig Robinson, StoneRiver; Karlyn Carnahan, Novarica

672 Data Conversion • The legacy replacement challenge every insurer faces.
3:30pm – 5:00pm
Panel Members: George Grieve, CastleBay Consulting, Eric Miller, Erie Insurance, Matthew Josefowicz, Novarica

675 A Practical Guide for Using Open Source
3:30pm – 5:00pm
Panel Members: David Hanley, Insurance Systems Inc.; Chad Hersh, Novarica; Rod Travers, Robert E. Nolan Company

Wednesday, June 9

771 IT TOWN HALL
9:15am – 10:45am
Session Leader: Rod Travers, Robert E. Nolan Company
Panel Members: Marcus Ryu, Guidewire Software; Wade Rugenstein, Republic Group; Gary Mullen, Kaspersky Labs; Karen Furtado, SMA; Matthew Josefowicz, Novarica

The full program is online at here.
http://www.iasa.org/Members/Net/ConferenceDirectoryPublic.aspx

We also have a booth at the show, but don’t expect to find us there! You can reach Matt, Chad, Karlyn, and Don Desiderato by email and if we don’t already have a meeting scheduled, we’ll be happy to arrange a time to meet up.

See you in Dallas!

The iPad may be the best example of the “shareable small screen” – it’s very easy to pass back and forth in a personal meeting in a way that a laptop is not. This could well be a step towards solving the “kitchen table” problem that has bedeviled insurer’s field technology roll-outs for the last 20 years. Stay tuned…

(PS: I was pretty sure I wasn’t making up the category  “shareable small screen”, but I googled it on Friday May 28 and got no examples of prior use. So maybe I am…)