Novarica Blog

Novarica Market Navigators on Policy Admin Systems Published

May 25th, 2010 by Chad Hersh

We estimate that 30-40 P/C insurers and 5-10 L/A/H insurers went live with a new policy administration system over the last 12 months.

With over 50 P/C systems and 25 L/A/H systems vying for marketshare, it’s an intensely competitive and confusing marketplace. Our new updated Novarica Market Navigators are designed to help insurers rapidly scan the market and create their long shortlists for further evaluation.

The reports are online at

Posted in Insurance, Policy Administration Systems, Press releases

Novarica at ACORD/LOMA

May 20th, 2010 by Matthew Josefowicz

Novarica is a proud sponsor of the ACORD/LOMA Systems Forum, and the entire team will be at the show this year. We’ll be presenting in four sessions:

Tuesday, May 25, 2010

Analyst Panel – The Time for Action in Insurance
10:00 AM – 11:15 AM
Presenter(s): Kimberly Harris-Ferrante, Gartner Research; Matthew Josefowicz , Novarica; Craig Weber, Celent, LLC

This panel will include analysts from leading firms speaking on the current conditions within the insurance industry and how future changes will affect competitiveness. Best practices on IT use, business transformation, and strategy evolution will be highlighted.

Wednesday May 26th, 2010

Why Your CIO (Secretly?) Wants to Replace Your Core Systems–And Why You Should Let Him/Her!
9:45 AM – 11:00 AM
Presenter(s): Chad Hersh , Novarica; Paul Ayoub, Employers Insurance Company; Paul Vancheri, Fidelity Investments Life Insurance Company; Keith Sievers, Unitrin Services Group

CIOs are seeing the critical need to replace aging policy administration systems (along with billing and claims in many cases), but often the business has a difficult time justifying the cost. Hear from a leading analyst and several forward-thinking insurers on the real value of replacing these systems from both the IT and business perspective.

The Cloud’s Real Silver Lining: SaaS for Policy, Billing and Claims
2:15 PM – 3:15 PM
Presenter(s): Chad Hersh, Novarica; Mike Anselmo, Narragansett Bay Insurance Company

Is Cloud Computing a viable solution to meeting service level agreements, reducing total cost of ownership and providing modern tools and solutions that adapt to business change with ease? Conventional wisdom has been that core insurance systems are too customized and too complex for Software as a Service; but is that judgment based on fact or uncontested assumptions? Find out what attracted one insurance carrier to focus on the cloud imperative and SaaS for their policy and billing systems. Learn how insurers can utilize these innovations to achieve speed to market with lower risks than traditional models and a variable cost structure that reduces their total cost of ownership.

Cutting Through the Hype of Web 2.0 – or Who’s Really Doing What?
2:15 PM – 3:15 PM
Presenter(s): Karlyn Carnahan , Novarica

Is Web 2.0 just a lot of hype or is anyone actually using Twitter, Facebook or blogging for business success? A leading analyst presents survey information showing what’s really providing value in the insurance industry and gives ideas for how to put your toe in the water.

Our other principals, Martina Conlon and Don Desiderato will be attending as well. Keep an eye out for them on the show floor or in the hallways.

See you in Vegas!

Posted in Conferences, IT Strategy, Insurance, Policy Administration Systems

Do a Lot More with A Little More

May 12th, 2010 by Matthew Josefowicz

My latest column at INN is about the shift from the “Do More with Less” mindset of insurance IT budgeting to “Do a Lot More with a Little More.”

Across the industry, insurer CIOs are being called upon to deliver ever-increasing sets of business capabilities with budgets that are not shrinking, but also not growing fast enough to meet demand without a leap forward in efficiency. To meet these challenges, CIOs are embracing several key strategies, including blended sourcing, agile development methodologies and modern application infrastructures. While most insurer CIOs are not facing the declining budget situation of the last economic crisis, or even the beginning of the current one, the new rallying cry is to “Do a lot more with a little more.”

Read the full column at INN, and tune into my webinar on June 16 to join the discussion. https://www1.gotomeeting.com/register/577563121

Posted in IT Spending, Insurance, Webinars

US Insurer IT Budgets and Projects for 2010 and 2011

May 10th, 2010 by Matthew Josefowicz

We’ve just published our latest poll of 80 US insurer CIOs on US Insurer IT Budgets and Projects for 2010 and 2011. As predicted, insurer IT budgets continue to hold, with additional modest increases projected for next year.

Insurers continue to focus their IT spending on delivering badly needed business capabilities to support growth and reduce overall operating expenses, but highest priority areas vary widely by size and sector of company.

Highest priority initiatives continue to be policy administration and business intelligence, with claims and agent portals also important in some sectors.

I’ll be hosting a webinar on June 16 at 2 pm ET to discuss these latest findings. You can register online at https://www1.gotomeeting.com/register/577563121

Posted in IT Spending, Insurance, Press releases, Webinars

Three New Webinars This Week

May 10th, 2010 by Matthew Josefowicz

We’ll be appearing in three webinars this week:

- Rating 2.0: Improved Collaboration for Better Business Results (Me)
http://www.insurancenetworking.com/web_seminars/-24531-1.html
- Top 5 Ways SaaS BI can Transform Your P&C Insurance Business (Martina)
http://tech-decisions.com/webSeminars/SaasBI/Pages/default.aspx
- Customer, Marketing, and Sales Analytics (Me again)
http://www.insurancenetworking.com/web_seminars/-24575-1.html

Posted in Press releases, Webinars

M&A Update: EXL buys PDMA/LifePro

May 6th, 2010 by Matthew Josefowicz

We’ve been waiting for the rest of India, Inc. to follow InfoSys’ lead and snap up some US assets (see my post on InfoSys/McCamish at http://blog.novarica.com/?p=426) and this week EXL Services picked up PDMA (makers of LifePro) for a reported $14M, or 1.4x revenues.

In addition to giving EXL a widely used life insurance policy administration system asset, this acquisition buys them a reported 40 client relationships in one fell swoop.

With an estimated 1 in 5 US life insurers reconsidering their core systems strategy in 2010 and 2011, this acquisition moves EXL into a very active marketplace.

Who’s next?

Posted in Outsourcing, Policy Administration Systems

Novarica Research on Insurers’ Core Systems Projects Finds Business Capabilities, Not Cost Reduction, Drive Projects

May 5th, 2010 by Chad Hersh

We published new reports today that document the experience of US insurers that have undertaken core systems replacement projects over the past 10 years.

The reports, US P&C Policy Administration Projects: Averages and Metrics and US L/H/A Policy Administration Projects: Averages and Metrics present data and analysis on project scope, duration, resource utilization, cost, and business impact of implementing a new policy administration system based on a study of over 30 US Insurers.

Among the reports’ key findings:

Most recent policy administration projects seem designed to deliver capabilities or replace an unsustainable system, not necessarily to reduce costs dramatically.
Insurers have been most likely to use internal resources for testing and conversion, while relying on vendor resources more heavily during deployment.
Average project lengths are 1-3 years, but some focused P&C projects have been as short as 6 months.
Software license fees average less than 10% of total cost for life/annuity/health projects but closer to 25% for P&C projects.

We estimate that one in three property/casualty insurers and one in five life/annuity/health insurers are currently planning, evaluating, or conducting core policy administration system projects. These reports are designed to help insurers understand what their peers’ experience has been.

In addition to the quantitative metrics, the reports also provide insights into challenges and best practices.

Insurers can take four steps to increase their chances of success in these highly complex projects:

Clearly define your business goals and tie them to organizational goals; business ownership, not just sponsorship, is key.
Use high-level requirements to find the right vendor and set the project direction, and an iterative approach to developing more detailed requirements later.
Carefully evaluate vendors for both product fit and organizational capabilities.
Focus on program management and change management as well as project management.

We’ll be discussing the results on Wednesday, June 23 at 1pm on a Webinar. Register at https://www1.gotomeeting.com/register/639091960

Posted in IT Strategy, Insurance, Policy Administration Systems

Planning for Straight-Through Processing in Annuities

April 30th, 2010 by Don Desiderato

Straight-Through Processing (STP) continues to be embraced by major insurance carriers. Some of the primary reasons include: improved efficiencies that come with electronic submission, a reduction in not in good order rates (NIGO), and improved relationships with 3rd party distribution resulting from cooperation on STP initiatives. But while STP remains a priority, usage of STP has been modest over the past 3 years.

My new report, Planning for Straight-Through Processing in Annuities, is designed to give Life and Annuity operations executives and staff a high-level holistic view of STP and prospects for the future. It draws on years of practical experience, reviews of published articles, and conversations with insurance carrier executives. The report summary is online at http://www.novarica.com/report_stp_annuities.shtml.

Posted in Insurance, Press releases, eBusiness

Green, IT, and Insurance

April 28th, 2010 by Matthew Josefowicz

I had an interesting conversation with a reporter recently about insurers “going green.” As I see it based on conversations with our clients and Research Council members, there are two kinds of green initiatives: one is primarily PR related (playing to green-conscious consumers), and the other is focused on operational savings through reduced energy or paper usage.

In a perfect world (e-statements, for example), these go together. But other than the major consumer brands, most insurers are focused on the latter. Things like data center efficiency, reduced power consumption by servers, “smart” buildings designed to use less heating and cooling energy, restrictive travel policies, and printing restrictions happen to be green, but mostly they save green.

Posted in Innovation, Insurance

Sector Report: Workers Comp

April 21st, 2010 by Karlyn Carnahan

My new report on Business and Technology Trends in Workers Comp kicks off our new series on specific sectors. Based on interviews with Research Council Members and a detailed review of secondary data, the report examines market trends and recent technology initiatives across the Novarica Insurance Core Systems Map by Workers Comp insurers, highlighting more than 20 named examples of recent projects from public sources.

Top initiatives for WC carriers include core claims systems replacement, business intelligence – especially predictive analytics, portal functionality to provide self service capabilities both to agents and policyholders, policy administration system replacements, and document management upgrades.

I look forward to hearing from WC insurers — contact me at kcarnahan@novarica.com

Posted in IT Strategy, Insurance, Press releases