Novarica Council Gathers Insurer CIOs to Address The First Year of the Future

Matthew Josefowicz

Nearly 70 IT leaders from more than 50 insurers gathered last week at the 9th Annual Novarica Insurance Technology Research Council Meeting to participate in panels and workshop sessions with their peers, get insights from Novarica’s senior team, and attend keynote sessions from outside experts on operational transparency and cyber-security.

The First Year of the Future

We dubbed last year “The Year the Future Arrived” for insurance, when nascent trends like wearables, Internet of Things, consumer internet giants’ interest in the sector, and a growth of direct sales beyond personal lines became a reality. This year, the clock is no longer counting down, but counting forward.

Keynote: Nine Trends and Issues…

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My keynote focused on our Novarica Nine for 2016 and Beyond, looking how these and other trends are shaping the industry, as well as what kinds of technology strategies insurers are taking to address these trends, and how they are managing their IT organizations to deliver these capabilities.

…100 Technology-Enabled Capabilities

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We also reviewed our expanded “Benchmarking the New Normal” framework, which we will publish this summer, looking at deployment rates for 100 key technology-enabled capabilities across functional areas like product, marketing, distribution, customer engagement, billing, claims, and finance/operations and technology areas like data, digital, and core.

CIO Panel: Core, Agile, Evolving Customer and Employee Dynamics

Our CIO Panel, which included Kate Miller of Unum, Scott McClintock of OneBeacon, and Paul Brady of Arbellla, addressed strategic issues ranging from core systems replacement to embracing agile development to redesigning their organizations to make insurance IT an attractive career option for millennials.

Operational Transparency for External and Internal Customers

Our guest keynote, associate professor Ryan Buell of Harvard Business School, presented his research on operational transparency and its impact on customer service to a tremendously responsive and engaged group. We’d invited Dr. Buell to join us because his research is so applicable not just to the insurance customer experience, but to the relationship between IT and other business units. See this recent post for more on this session

Novarica Research on Core Transformation, Data, Digital

On the second day, the Novarica panel of Rob McIsaac, Martina Conlon, Mitch Wein, and Jeff Goldberg from our team discussed some of their recent research and customer projects in areas like core systems selection, transformation project assurance, data strategy, meeting agents’ digital needs, and a wide range of other trends and best practices.

Discussion Groups of CIO Members Focus on Their Key Issues

Special interest group discussions for group voluntary benefits, individual annuities, individual life, personal lines, specialty, commercial lines, and workers comp explored recent research relevant to each sector. In discussions co-led by a Novarica expert and a CIO chairperson, these groups addressed topics like enrollment standards, impact of the DOL fiduciary ruling, market dynamic changes, ISO rating, and core systems vendors.

Cyber-Security Threat Evolution and Preparation

Distinguished professor and Department of State cyber-security adviser Dr. John Savage gave a closing keynote on the cyber-security, emphasizing the importance of managing security beyond perimeter protection and staying engaged with industry groups to monitor the evolution of new threats globally.

Knowledge-Sharing and Networking

novarica-councilCouncil members valued the opportunity to network and learn from each other in a private, vendor-free environment, and many of the special interest groups have already made plans to meet again later this year. We’ll be publishing a report summarizing the discussions and panels next month, and the 10th Annual meeting will occur in late April, 2017.

For more information on joining the Council, senior insurer IT executives are invited to visit http://novarica.com/council and request membership. Membership is free and has no obligations.

Operational Transparency, Agile, and Perceived Value

Matthew Josefowicz

Our guest keynote speaker at the recent Novarica Insurance Technology Research Council Meeting was professor Ryan Buell of Harvard Business School, who presented some of his recent research on operational transparency and its impact on customer service.

Transparency Changes Perceptions

The main finding of Dr. Buell’s research is that service providers perform better when they see the impact that their work has on customers, and that customers are more appreciative and feel better served when they see the work that has gone into providing services to them.

Here’s a video of Dr. Buell presenting on this topic as it relates to government services, from his website:



I invited Dr. Buell to join us after encountering his research online, and realizing how important this topic was not just for insurance customers, but for the internal customers of insurance IT leaders.

Insurance is an opaque product

For customers, insurance is an invisible and mysterious product. Few customers know what goes into underwriting and issuing a policy or processing a claim. Even for distributors, a major source of frustration is not understanding when or how decisions are being made. Some insurers have found that simple process additions like progress bars, proactive process notifications, or simple explanations can have an impact on customer and agent satisfaction levels.

IT is also an opaque product

IT is an equally opaque product to its internal customers. Leaders and staff in other business units generally have a poor understanding of IT, why things that seem simple are complex, how long tasks actually take, and generally just what the heck those technology guys are doing all day. This lack of understanding and lack of transparency leads to frustration and turns other business executives towards trying to manage IT with the only tool they do understand: budgets. This rarely leads to value creation.

For IT, Agile is helping

With the mass adoption of Agile development by insurers, this is starting to change. One of the main benefits of Agile is enforcing regular communication and review of progress between technology staff and other business units.

As shown below, the majority of insurers report that this is improving end-user satisfaction with delivered products, relations between IT and other business units, and even IT job satisfaction.

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Through frequent interactions and reviews, other business units feel greater ownership in IT projects, and IT feels like it’s making a difference in achieving overall business goals.

Future collaboration

We believe that insurers can benefit from an operational transparency orientation in multiple areas, and we’re currently in discussion with Dr. Buell about future collaboration and activities with our team and Novarica Research Council members. Contact me if you’re interested in learning more.

Related Research

  • Novarica Nine Insurance Technology Trends and Issues for 2016
  • Agile at Insurers 2015