(Re)Allocating Insurance IT Investments

You’ve probably all heard of something like “if you were king – or queen – for a day what would you do?” Well, if someone waved that magic wand, made me king for a day in charge of insurance IT investments and told me that my actions would stick even after the crown disappeared, I would make some changes.

First, I’d get rid of the legacy systems. You know, those core administrative systems that are 20, 30 or 40+ years old. Yeah, they work but that’s not enough. Insurers need systems that can leverage current and emerging technologies significantly quicker than their existing legacy systems.

More importantly, insurers must have core administrative systems that can meet, if not exceed, changing customer and producer expectations. I’d either rip-and-replace them or  move these core administrative systems to the cloud. Yes, I mean the whole enchilada –  we would use a ‘platform-as-a-service’ encompassing software, hardware and, of course, storage as a service.

I’d set strong SLAs and tell all of my providers to watch The Godfather several times so they would get the basic concept of the implications of missing our company-required SLAs.

Next, I’d ensure we have systems (again in the cloud) necessary to make it easy for our producers, policyholders and prospects to conduct business with the firm. I’d apologize to all of our agents and brokers for breaking  our promises to quicken the pace of onboarding, licensing, appointments and training  (not to mention quoting and rating) that we so eloquently (and often) articulated to them  but have never fulfilled.

And I’d make sure we had the systems in place to capture and send data across the value chains between their agencies or broker firms, our field staff and our home office departments by leveraging the Web and eliminating paper. Snail-mail banished. Part and parcel, I’d implement electronic signatures [it has only been legal since Clinton was president] to enable the acceleration of onboarding, business acquisition, claim management and whatever other business functions needed authorizations.

Next I’d tackle analytics. Decision-making is critical for current and long-term strategic health. That means having robust analytic capabilities. And that means we must have the systems – and competencies – to use analytics. But analytics encompasses both structured data but also unstructured content. I’d ensure we used predictive analytics for modeling – incorporating spatial intelligence (i.e. location data) – but also text data mining.

Product development, target marketing, claim management, reinsurance (what mix of ceding and assuming?) and customer service are dependent on expert use of analytics (or would be if I was king for a day). I’d build an area of analysts that were expert in statistical analysis and using the capabilities of semantic technologies.

I’d also make sure we used all of our cloud capabilities enabling our operational engines and analytic systems to work together to support eDiscovery and compliance requirements.

If I was king for a day and could reallocate my insurance company IT investments, that’s what I would do.

What would you do?

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Published in: on September 7, 2009 at 1:02 pm  Comments (3)  
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3 CommentsLeave a comment

  1. well, it’s all to the books, really. in your terms I may be attributed with lesser crown. that of a prince, perhaps.

    I have started up an online channel for large Ukrainian insurer, and after one year I have more then half of what you have described ready not only for my channel, but also for the rest of the company including bank assurance, agents, etc. all brand new MS technologies, latest SQL, Silverlight, you name it.

    and you know what?

    no one cares. except few people, who, unfortunately are not decision makers.
    and decision makers are pretty finely accustomed with murky waters ’round them. they have no need of anything that will disrupt that precious dirty cupboard of theirs.

    and here I am asking you: what now?

  2. Barry,

    I like your post. I agree that the insurance industry is so far behind in technology as opposed to other industries. Your post is a bit in line with my current posts on Agency Management Systems. Once I am through with the Agency Management Systems vendors then I am going to post about the agencies. The latest info I have says 20% of agencies no no system and a very large number have old systems as well.

    I do tend to agree with Felix that it seems only a very few insurance carriers appear to care about what the true needs of their agents or insureds are. In my work with agents I find some of the same head-in-the-sand attitudes.

  3. Barry, perhaps your King wish list isn’t so far from reality. We’d all like to get rid of legacy systems or at least, improve the integration into legacy systems. Doesn’t SOA help. While SaaS and cloud computin have been around awhile, the buzz and “hype” has grown considerably this past year: see my own recent post http://www.codegaconsulting.com/blog/78-emerging-trends-in-technology.html

    Security remains a big concern for financial service providers on the use of the “cloud”.

    With respect to your comment on SLAS, interestingly, I was at a talk during the week hosted by Enterprise Ireland http://www.enterprise-ireland.com/nse – The New Software Economy: Fergus Gloster, ex-VP of SalesForce.com was one of the speakers. He suggested we forget about SLAs – they are meaningless. In a SaaS model, unless the provider delivers the service, the buyer will walk. We won’t have to create and manage cumbersome SLAs and SLA deliverables and contracts. The buyer will have much more freedom.

    I look forward to your future posts and would love a copy of your survey when it’s completed.

    Una Coleman
    Una Coleman

    Director

    Codegaconsulting

    http://www.codegaconsulting.com

    Tel: +353 (0) 1 2966048

    Mob: +353 (0)86 8186903

    Skype: unacoleman

    Twitter: unacoleman

    http://www.linkedin.com/in/outsourcedmarketingsolutions

    una.coleman@codegaconsulting.com


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