It is amazing to think that we’re already into the second quarter of 2016. The year is moving fast, and with it the opportunity to see how carriers are responding to the urgency of a “new normal” is coming into clearer focus. I had the good fortune to be able to be the “Master of Ceremonies” for the CIO Insurance Summit in NYC on April 5th, which clearly provided insight into what is on the mind of participant carriers. The pace of activity is notably picking up for many lines of business although, as one of my mentors once shared, it is important to avoid confusing activity with progress. Real progress appears to be somewhat elusive but the quality of the dialogue definitively appears to be elevated. 2016 promises to be a very interesting time.
From our sessions in NYC a number of clear themes emerged that are worth sharing.
Cloud deployments are getting more real even as concerns remain in some quarters. We had a wide ranging discussion related to the opportunities and concerns that seem to concurrently emerge around the use of cloud based options for carrying mission critical workloads. In many organizations it appears that “security” and “compliance related risks” remain at the forefront of an inability to foster faster adoption. As we explored this, I discovered that many companies still haven’t made the connection that efforts to move CRM (SalesForce) and e-mail (Office 365) have already broken through a barrier that appeared daunting to carriers in the very recent past. Having effectively put these installations to the test, carriers with these implementations are increasingly willing to acknowledge that the security models are as good as, if not better than, what they are able to implement for their own environments. As additional mission critical workloads migrate toward this type of deployment (e.g., Workday for HRD and financials), it helps to push organizations to articulate what the real concerns are and how to best address them. The reality is that this is frequently not so much a technology issue as it is one that is linked to emotional, political or organizational issues that need to be addressed before the discussion turns to the selection of a hosting service. For CIOs and their teams getting in front of the issue to do effective education of business partners as well as developing a point of view on which cloud based providers are best positioned to be part of their tool kit (they are not all created equal) can be part of an effort to build momentum and organizational support. Going “full to bright” in a short timeframe may be too much for many organizations to accept, which runs the risk of triggering an enterprise immune system reaction that can be painful.
Data governance remains a significant concern. With a myriad of business units, products, core record keeping systems, and rules of engagement that may conflict from one line of business to another, this remains an area of notable concern – and investment – at carriers we spoke to. Most carriers still lag far behind the banking world in terms of an ability to understand their business from the outside looking in (rather than from the inside looking out). However, there continue to be advances in the idea that there is value in gaining a full view of both customer and producers, and that the investment in both technology and business process to allow for achieving informational insights from internal data can be quite high. A common theme among participants appears to be the desire to construct a 360-degree of customers but that breaking through some of the organizational barriers within companies can be daunting. For carriers considering this challenge, investing time and money to really build a robust data governance facility can be highly valuable. Even some of the compliance related effort for Know Your Customer (KYC) initiatives can also create operational and marketing benefits if used correctly. Once again, however, one of the challenges that can be most difficult to overcome is the “human” one. If line of business executives and managers are focused on optimization at the business unit level, while data analytics efforts around customers are focused at the enterprises level, the inherent conflict can substantially mute any resulting benefits to the organization. Being clear that this is not purely a technology issue is key to achieving desired outcomes. One key reality that becomes clear as companies talk about their desire to use better analysis of data to improve a range of business outcomes: while many talk about Big Data, struggles remain with managing Small Data in quantity.
Definitive plans to address Millennial needs remain elusive although awareness is elevated. We had a lively discussion about this issue, focused on a number of key challenges facing carriers. At a time when 10,000 Baby Boomers retire every day (and concurrently 9,000 children are born to Millennial parents each day) the opportunities associated with getting positioned to take better advantage of market dynamics would appear to be very clear. That said, most carriers acknowledge that they have not yet “cracked the code” on how to best position themselves in terms of both products and service models that will effectively speak to a new generation of potential consumers. We discussed some of the efforts being put forward by companies to better understand these dynamics (e.g., MassMutual’s coffee shops) but a reality is that the answers to changing market needs will require some level of experimentation and testing of hypotheses, an approach which may well be counter-cultural for the very organizations whose long term success is impacted by their ability to start thinking differently. Avoiding a “Kodak Moment” can be a function of how well carriers deal with a range of challenges including the demographics of their agency forces; the average age of an agent in the USA is now 59 with an estimated 25% of today’s agents potentially leaving the business by 2018. Concurrently, a number of carriers noted that their own HR policies and procedures do not appear to be adjusting appropriately to deal with the increased velocity of voluntary turnover associated with the emerging Millennials who will represent 50% of the USA labor force by 2020. Mentoring programs, efforts to create more varied experiences that allow for expanded horizontal movement within organizations, and increased flexibility related to geographic location have proven to be effective “tools of the trade” for some organizations as they’ve moved to adjust to a new reality, but the broader trend remains clear. The emerging generation of employees will have a very different relationship with employers in the foreseeable future than their parents or older siblings did. Implementing procedural changes for everything from employment procedures to knowledge management will be important to operational effectiveness.
The increased urgency at carriers is timely. With cycle times across many facets of the business being reduced, user tolerance for poor experiences being driven down and the competitive threats from many quarters being elevated, the current planning horizon is moving with surprising speed. Welcome to the future!
If you’d like to get a copy of the presentation materials used in NYC, please let me know by sending me a note at RMcIsaac@Novarica.com.