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What’s a Nice Insurer Like You Doing with a Sensor Like That?

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American Family Insurance and Microsoft Corp. recently announced the establishment of a business accelerator which will focus on home automation.  According to the release, “the accelerator will help the next generation of startups create advancements that can help lead to safer and smarter homes.”

We also think that this will help American Family get a head start on a road that leads to smarter insurance products, pricing, and services.

We’d like your thoughts here.

Is telematics just a gateway drug? 

Telematics is all the news these days.  Although we have a low double digit count of insurers who have announced or implemented telematics-enabled usage-based insurance (UBI) programs in Canada, it seems that the die is cast.  Most commentators agree that, over a 10 year period in North America, there will be a penetration rate of 20%-35% of insurance policies written on a UBI model.  UBI will be entrenched in the fabric of insurance in Canada.

The outcome?  This will likely cause some disruption, but not the end of the world for telematics-free insurers.

Unless, telematics just the entry point to a new model for insurance.

It’s about the (big) data …

Writing in Insurance Networking News, Chunka Mui, of Devil’s Advocate Group, Mike Boyle, from Perseus Technical Strategies, and INN editor Chris McMahon posit that while insurers have always relied heavily on data, things are changing more rapidly and more radically than common wisdom suggests: “market competition is likely to soon be defined by how well carriers leverage data-based decision making across every aspect of their business, including rating, product design, underwriting, claims, acquisition, retention and cross-selling.”

The authors cite 3 winds fueling this particular tornado:

  • Telematics, collision avoidance and self-driving technologies are lowering accident frequencies, which will drive down premiums;
  • The volume and velocity of the data created by these advanced automotive technologies will accelerate the importance of data mastery and analytics
  • The rate of consumer adoption will require insurers to accelerate speed to market, or suffer from adverse selection

And, while the focus is on automotive technology, we believe the spill over to other lines is inevitable.  The industry is coming to a “defining moment”.  The authors conclude:

Those who lead must prepare for a technologically-driven disruption, or risk being saddled with bad risks and withering into irrelevancy. CIOs and other senior leaders should create robust simulations of the business under different assumptions about adoption and the impact of the technology…

Queue the Internet of Things

Posting on the Celent blog, recently, Donald Light, the analyst firm’s Director, Americas Property/Casualty Practice, focused on Apple’s announcement of two new frameworks “aimed squarely at two of the hottest sectors in the Internet of Things (IoT): HealthKit and HomeKit”.   The former facilitates communication with fitness and health apps.  The latter, “uses Siri to poll and control household appliances and systems (heating and cooling, lighting, security (and eventually entertainment?)”

The announcement named some key partners for Apple, including the Mayo clinic and Phillips Lighting.  Light then notes:

What is missing from this announcement is any mention of how health insurers or homeowners insurers could participate in what Apple wants to be a foundational step for connecting networked sensors to data stores, and then using analyses of that data to better price, underwrite, and control losses.

After noting how effectively smart phones are changing aspects of insurance, Light notes that Apple is positioning itself to do the same with the Internet of Things.

Light then poses the money question: “Will insurers jump on this wave—or stay on the beach?”

That analytics engine seems to have some capacity…

This is where we need your help.

If you are an insurer and you have just invested multiple millions of dollars to  have advanced  analytics capacity (hardware, software, and grey-matterware), does it make sense to use it just for one line of business?  Or would you think that maybe what’s good for the auto-goose, might be good for the property-gander?

And if you write commercial lines as well, would you keep the the analytics capability tucked into a personal lines envelope?

What do you think?

 

 

Is IT’s Elevation of Role Raising Risk Levels?

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The profile and influence of  IT are expanding — rapidly. Business leaders speak about the integral role of IT in modern commerce.  We see lots of articles saying that IT is one of the growing professions.  Even the NASDAQ is supporting pretty aggressive multiples on technology stocks with little talk of a bubble.  It’s a great time to be busy in a hot profession, right?

Some recent research suggests we might do well to remember that with reward comes risk.  And that risk could get personal; when we meet the enemy, as Pogo said, he might possibly be us.

We’d like to know your thoughts on risks in the insurance IT world.

Be careful what you wish for …

IT professionals have long argued that technology is more than an efficiency tool, it can, and should, support strategic initiatives.  On this basis, IT leaders should be recognized as peers at the executive and board levels.

It seems the right folks have been listening. Writing in The McKinsey Quarterly (reprinted in Insurance Networking News),  Naufal Khan and Johnson Sikes reported on the most recent McKinsey global executive survey on business technology.  At a high level, it is a good news story for IT professionals seeking a broader business role:

“Concerns about managing costs are down, while larger shares of executives now say their organizations are using IT to improve business effectiveness and information availability. Respondents cite these same objectives most often as ideal priorities, suggesting that companies are getting better at aligning their actual priorities with what’s ideal—and that more executives see IT as core and relevant to day-to-day business, not merely a cost center.”

And spending is reflecting these expectations.  Over the next 3 years, respondents expect average spend on infrastructure and core applications to drop from 53% of IT budget to 41% while spend on analytics and innovation initiatives is expected to increase from 22% to 32% of the same budget dollars.

… You just might get it

The good news doesn’t continue unfettered, however.  The same respondents see IT being less effective at achieving business goals than in the past.

From 2011 to 2013, the survey indicates slight drops (less than 10 basis points) in the perception that IT facilitates some functions: Sharing Knowledge, Delivering Productivity Gains, and Tracking Customer/Segment level profitability.  There was a greater drop in facilitating: Creation of New Products (13 basis points) and Entering New Markets (20 basis points).

Insurers understand risk …

So IT departments in insurance companies can expect close scrutiny.  According to the results of Wolters Kluwer research for its Regulatory and Risk Management Indicator report (reported in Insurance & Technology), insurers don’t find the view all that comforting.

When asked what was the top obstacle to managing risk at the enterprise level, 37% of the 300 organizations responded “Too many technology systems that are not integrated.”  This was the highest response overtaking others including “Regulatory pressure”.  A separate, but related IT category, “The lack of quality data, management, and analysis,” earned support from an additional 14%.

Steve Taylor, senior market manager of enterprise risk and compliance for Wolters Kluwer, told Insurance & Technology that out-of-the-box implementations of technology to meet a wide range of needs “are often lacking when faced with the demanding and increasingly complex landscape of regulations for financial services companies.”

Where to from here? It gets personal…

McKinsey asked respondents what needed to be done to improve IT performance, Naufal and Sikes indicate that “the largest shares of all respondents say improving business accountability, reallocating funding to priority projects, and improving the level of IT talent would do most to improve performance.”

Some went further.  Twenty percent of respondents identified “replacing IT management” as a solution, up from 13% in the 2011 survey.  Interestingly, when the responses from IT personnel were segregated, Naufal and Sikes report: “28 percent say new management would boost effectiveness, more than twice the share of business executives who say the same.”

Ouch.  Et tu Brute?

What do you think?

Is IT just going through growing pains and needs time to adjust to a newer, broader mandate?  Or  are there some fundamental obstacles that prevent us from achieving the higher expectations business is putting on us? Or something else?

We’d like your thoughts here.

Cloud, Agility, Innovation: Is This the New Holy Triangle?

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IT professionals are familiar with the sacred triangle of projects: Scope, Resources, Time. The idea is that, as in a right triangle, the scope of a project will drive the requirements for resources assigned and the time allocated for the activities.

It seems that there is another triangle forming in the sky, suggesting that the size of cloud applications and services is proportionate to the amount of agility and innovation that an organization is seeking.

We’d like to know what you think of the construct.

Growth of the Cloud in Insurance

Cloud services have emerged as a viable alternatives for firms looking at outsourcing IT functions to reduce costs.   Looking at the financial services generally, David Linthicum, SVP Cloud Technology Partners recently noted that “In the world of finance, new regulations are driving up budgets and cloud computing seems like a good approach to drive them back down.”

Driven by continuing needs for expense management,  insurers have been enthusiastic in embracing the approach.  As reported in Insurance Networking News, Everest Group has found that, while the overall financial services market for IT Outsourcing (ITO) has been relatively flat, insurers were growing their use of ITO (and business process outsourcing – BPO) to achieve needed efficiencies.

The Shape of Clouds can be agile …

However, once cloud computing is understood and embedded, insurers frequently find that the enabling agility is as or more appealing that efficiencies.  Kathy Burger, Editorial Director of Insurance & Technology recently wrote:

Beyond their appeal as variable-expense and cost-effective computing models, cloud-based and other as-a-service and virtualized methods let businesses (including insurance) transform their approaches to market changes. Resources can be deployed more readily to where there’s a high-priority need, whether it’s responding to a natural catastrophe, entering a new market, supporting the annual report process, or developing mobile apps.

And then comes Innovation …

According to Rajesh Ranjan, VP of Everest Group, insurers’ conservative reputation for technology innovation is vulnerable to cloud formations.  In an interview with Insurance & Technology, Ranjan said that this reputation “is opening up as they look to outsource IT and business processing.”

As social media, mobility, analytics and cloud computing (affectionately known as SMAC) encroach on traditional technology constructs, insurers are being forced to respond with innovative approaches.  Ranjan suggests that consumerization of IT is motivating insurers to enhance their customer experience strategies and prepare for new advancements in the changing tech market.

Suppliers are waiting to help …

Technology and application suppliers are willing collaborators in bringing cloud based applications to insurers.  Writing in this space in January, Guidwire’s Eugene Lee provided an outline of a business case for ‘hybrid’ cloud applications such as Guidewire live.  And we reported on the innovative insurance applications that are starting to emerge based on SalesForce.com, the prototypical cloud platform.

There are some caveats …

Nothing in technology is perfect (say it ain’t so!).  There are legitimate concerns about security, for example.    However, Burger writes, “as insurers recognize that agility is attainable and use of cloud and hosted systems becomes more about strategy and less about cost-cutting, security will become an operational issue, not a barrier to adoption.”

What do you think?

Are cloudy applications or services in your organization now, or imminently on the horizon?  If so, what are the business case elements?  And what are you seeing as the results.

If you’ve looked at clouds, and made a decision to reject or wait, what are your concerns?

Leave your comments below.  As they used to sing in the age of Aquarius: Let the sun shine in!

 

Note:  A number of presentations at #ICTC2014 will focus on agility, innovation and alternate delivery of services. 

It’s a Big (Data) World Out There

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Most of the buzz around big data focuses on marketing, for good reason. However, there are myriad additional applications for Big Data; separately, they are significant, and together, they can transform insurers’ external and internal activities.

Big Data and analytics will be important topics at the 2014 Insurance-Canada.ca Technology Conference next month. In advance, we’d like your questions and comments on the role of Big Data in your enterprise.

Marketing is the starting point for better customer service…

Writing in the Expert Forum of Insurance Networking News, Chander Ramamurthy, architect at  consultancy X by 2, notes that Big Data enabled  ‘personalization’ is the hot trend: “Gathering more information about customers helps insurance companies provide more-personalized products and services.”

But these services can be extended by using additional data.  Ramamurthy notes, “Analyzing social feeds can help insurance companies better target new customers and respond to existing customers. Using big data, they can pinpoint trends, especially of complaints or dissatisfaction with current products and services.”

Driving towards service excellence and increased product offerings …

Usage Based Insurance (UBI) relies on Telematics driven Big Data.  However, it also forms the basis of new offerings which could enhance the value of the data by extending its use.

Deloitte Consulting LLP recently issued its 2014 insurance industry report which comments on the challenges and opportunities of integrating numerous data sources.   As reported in Insurance & Technology, the report suggests that mobility can offer capabilities beyond Telematics.  The study anticipates that insurer apps  will “more routinely employ time and location data to issue customized safety alerts, vendor recommendations, and perhaps even loyalty program discounts.”

Looking internally ….

Big Data can also drive internal improvements.  Ramamurthy notes that organizations can improve productivity “by recording usage patterns of an organization’s internal tools and software.”    This can lead to:

  • Creation of more useful software that better fits the organization’s needs
  • Avoidance of tools that do not have a good return on investment
  • Identification of manual tasks that can be automated.

Scoping is critical …

By its very nature, Big Data is, well, big. Ramamurthy writes, “No piece of data, regardless of form, source or size, is insignificant.”  But that doesn’t mean starting with everything.

Neal Baumann, Deloitte’s global insurance sector leader suggests that, to be effective, implementations and implementers must be focused:  “insurers should be prepared to make the tradeoffs needed to develop capabilities that they believe will provide them with strategic advantages.”

What would you like to hear at #ICTC2014?

ICTC-wheel-plain-r60The Insurance-Canada.ca Technology Conference 2014 have a number of sessions devoted to Big Data, Analytics, and Telematics/UBI.  We’d like to give the presenters your thoughts in advance.

Let us know your expectations for Big Data in your company.  Have you started?  What results have you seen?  What are the challenges you face?

It’s a Big Topic.

 

 

 

2014 Imperative: Execute New Technology Initiatives Effectively

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Over the last few years,  it seems we have entered yet another era of dramatic changes in technology and applications in the insurance industry.  We have seen new core administration systems based on modernized technology, applied analytics tools and engines,  usage-based insurance programs, tapping into telematics devices, etc.  There is increasing reliance on cloud-based services, replacing traditional software and storage methods.  Moreover, we are using new techniques, such as agile methods, to accelerate implementations.

But one thing has not changed at all: execution capabilities differentiate winners from losers.

Technology and applications on their own do not drive positive change.  In fact, the resources required for implementation of  new technologies can be disruptive to routine operations.  Without a clear, properly resourced and managed program, even the best applications can contribute more to cost than to profit.

We’d like your view on how we are doing in Canada.  Are you seeing implementations being brought in successfully?   Are there areas of weakness?

Theory versus reality

Joe McKendrick, writing in Insurance Networking News’ (INN) Experts’ Forum, notes that cloud and big data analytics are all the rage.  “But surveys I have been involved with find that maybe about 35 percent of companies are using private cloud in some capacity, and about 25 percent are using public cloud services for core enterprise applications,” McKendrick writes, concluding, “there’s still a lot of work to be done.”

Improving underwriting efficiency and effectiveness is a hot button issue in many companies.   In late 2013, Accenture surveyed 559 commercial insurers in the US and found that “an overwhelming majority of underwriters (93 percent) perceive investment in technology as the best way to improve underwriting quality, and two-thirds of respondents said technology has significantly improved underwriting performance.”

However, the results of technology projects do not hit the mark completely, according to survey respondents.  Fifty-four percent of respondents to the Accenture survey “said technology also has increased their workload.” Reasons provided were:

  • lack of data integration across their company (81 percent of respondents)
  • lack of process integration (67 percent)
  • insufficient training (57 percent)

What can be improved?

Looking at the results, John Mulhall, managing director in Accenture Property and Casualty Insurance Services, noted that while there had been progress, “the full benefits of technology investments in terms of productivity and efficiency cannot be achieved without broader data and process integration across the organization.”

This sounds like effective project planning and execution to us.

McKendrick notes that as reality sets in with some of the modern technologies, there is an opportunity to re-emphasize execution.  He quotes Frank Petersmark, CIO Advocate for the insurance consulting firm X by 2 saying that 2014 with be the year  where “X marks the spot” — with X standing for execution.”

Noting that patience has limits, Petersmark says that 2014 “will be all about executing on the many transformative initiatives in play at many insurers — core systems, business intelligence and analytics, and customer facing portals and platforms — to name a few.”

What do you think?

We’d like your perspectives.  What role is execution playing in new technology projects?  Are IT and Business managers realistic about scope and timing?  Is a little failure required to get things on course?

 

Does IT Have A Future in Marketing?

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As insurance organizations finish their planning sessions for 2014, we are getting an impression that the coming year will be a watershed for the industry as a whole, and for IT in particular. We get the sense that the priority for most organizations will be execution of externally-focused business plans to respond to unprecedented challenges (and opportunities). In the midst of this maelstrom, the role of IT could change radically, with a new group of users directing the use of the technologies.

We’d like to know what you think.

New Business Needs Require New IT responses

There is little doubt that expertise in Data, Big Data, and Analytics is rapidly becoming a critical success factor for insurers.  In times past, the acquisition, storage, security, and use of data was the domain of IT.

That is not the case now.  As reported in Insurance Networking News, “insurers have begun shifting from cost cutting measures to more ambitious technology projects intended to support competitive initiatives and drive efficiencies, according to industry experts.”  And may of these initiatives are being put in the hands of marketers and actuaries, with IT playing a support role.

One example cited was Allstate in the US, which is using data to inform and leverage its advertising spend.  Pamela Moy, Allstate’s VP of marketing analytics, research and administration, notes that US insurance advertising spend is over US$4 billion.  In order to ensure these dollars are spent wisely, Moy notes, “”We have to make sure that we’re breaking through with every single dollar that we were spending and that we are reaching the right people.”

To this end, Allstate is acquiring and deploying sophisticated data and analytic tools to marketers to monitor and change advertising campaigns.  Referred to as data management platforms (DMP) these tools are capable of integrating with internal and external data to achieve market segmentation, in addition to providing analytic capabilities.

The DMP used by Allstate is (x+1) Origin.  The model described on the (X+1) webiste provides for IT to manage the vendor and its reach, but it is clear that the marketers are in control of the data.

What is the end game here?

As reported in Information Week, recent data from Forrester suggests that the traditional IT department is under pressure from two trends:  commoditization of technology and targeted customer engagement requirements.  On the one hand, Forrester research director, Christopher Mines says, “There are significant elements of enterprise technology that are commoditizing, or have already commoditized.”  According to Mines, these could include IT core infrastructure functions such as servers and enterprise applications.

At the same time,  other applications – especially those targeting customer engagement – will stretch IT resources.  Mines notes that the CIO will “play the role of orchestrator and integrator of external services and service providers”.  This could result in the CIO reporting into marketing, and a centralized IT department becoming a “thing of the past by 2020.”

What do you think?

Do you see a path that would put marketing in control applications, data, or other resources that were previously in the IT domain?  Would this be bad news or good news, as far as you can tell?

 

 

Big Data Secrets, Including How to ‘Fail Correctly’

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Big Data is a huge topic for insurers these days. A number of projects are being contemplated, with high expectations. However, Big Data projects differ from other IT projects in several respects. Some useful advice is emerging from several sources, including the value of scoped failure. The Insurance 2023 Forum will welcome several experts to its program in October to discuss Big Data with insurers and brokers.

What Are Big Data?

First, let’s define what we mean by big data.  These data are not only much bigger than regular data, they  are complex (dealing with many elements), not structured (no ordering), continually being updated, and are really important to decision makers.  Practitioners like to refer to the four ‘Vs’ of Big Data: Volume, Variety, Velocity, and Value.

Data produced by Social Media is a common example.  Think of looking the full Twitter Feed or all Facebook updates and asking, ‘What does that mean?”

So, how can an insurance executive start to think about Big Data?  Some advice is emerging that sounds like real common sense.

Failure Can Be a ‘Good Start’ for Big Data Projects

This is complex stuff with lots of promise.  We can’t approach Big Data in the same way as we do other insurance-Technology projects.  Writing in the GigaOM blog, Ron Bodkin, CEO  at Think Big Analytics, notes that failure can be an important starting point for projects:

“Big data, in its raw form, allows for a ‘test and learn’ approach. Companies have to create many small “failures” by developing hypotheses and examining them against the data. ….

“These ‘failures,’ part of the process of uncovering good unbiased analysis, create tremendous opportunities for companies in a number of areas: customer recommendations, risk measurements, device failure predictions and streamlining logistics to name a few.”

 Lessons From the Past for Insurers

While Big Data projects are different animals, we can take lessons from past initiatives.  Writing in Insurance Networking News, Joe McKendrick notes that there are people and technology challenges that we have encountered before, but not with the same risk,  import and urgency:

“In big data scenarios, you have managers not trained in statistics making bet-the-business decisions based on data of unknown quality originating from unvetted sources. You have MBAs that think they can push a button to have insights auto-generated for them. What could possibly go wrong with that?”

McKendrick suggests common sense steps that can mitigate the risks while allowing expeditious progress, including:

  • Start with small pilot projects to measure and attempt to capture some of this data
  • Work closely with business units, determine what kind of data analysis or access will solve particular problems,
  • Build business analysis capabilities.
  • Encourage critical thinking among business users of the data.

More Common Sense on Big Data Available @ Insurance 2023

Both McKendrick and Bodkin note there are a lot of organizations offering help with Big Data, but that users should be judicious as there is a fair amount of mis-information going around.  There is a unique opportunity coming up at the Insurance 2023 Forum in Toronto On October 3, 2013 to have a conversation with two of the recognized Big Data experts in the Canadian P&C Community.

Greg Purdy,  Managing Partner in getClarity will be presenting on the importance and correct use of data in the P&C industry in Canada. Colin Smith, Senior Vice President at OPTA will be discussion the use of a variety of tools for measurement, monitoring, and prediction.

Details on the forum and registration information can be found at the Insurance 2023 Agenda Page.

Meanwhile, we’d like your thoughts on and experiences with Big Data and Insurance.

 

 

 

 

 

Is Integration the Weakest Link in Systems Modernization?

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Systems modernization projects continue to occupy the lion’s share of IT time, resources, and budget in many insurance organizations. Two oft-cited reasons for these initiatives are (1) to respond to business needs for rapid access to more and better data, and (2) to support new, customer-facing applications. Several recent reports suggest that there is a part in the middle – integration – that is proving to be the tricky bit linking actions to results. One of these reports lays the responsibility for fixing the problem on IT’s desk.

We’d like to know what you think. Are new, modern systems implementation projects taking integration into account to successfully deliver benefits?

Insurance – challenges are resource and integration

As reported in Insurance Networking News,  a study from SMA – Strategy  Meets Action found that 40% of the 121 insurers surveyed are “currently involved in either PAS (Policy Administration Systems) implementation or the vendor selection/planning phases of replacement.”  The most frequently cited challenges for these organizations fall into two categories are:

  • IT Resources
    • Dependency on IT to make changes (58% of respondents),
    • Competing priorities for IT resources (46%)
    • Resources unavailable to work on older systems (31%)
  • Data/Integration
    • Difficulty integrating other services with core systems (45%)
    • System not able to easily provide information to business (41%)

In our mind, these are two edges of the same sword.  Business users are investing time and money to provide internal and external users seamless access to information and technology-driven resources.  This requires IT staff resources to implement and integrate systems.

Beyond insurance – integration and systems of engagement …

Insurance is not the only industry modernizing technology.  IBM commissioned Forrester Research to study ‘systems of engagement’ (defined as: “mobile applications and other systems designed to customer expectations for personal attention, immediate response, and self-service “) and the capabilities of corporate IT organizations  to support these systems.

Forrester surveyed 423 IT and Marketing decision-makers.  Its report concluded that “integration with back-office systems is the biggest barrier to consumer-facing systems of engagement, and yet most enterprises aren’t investing to remove that barrier.”

The study’s authors conclude that there are three new forms of integration required:

  1. Collection, analysis, and delivery of information in “real time.”
  2. Information delivery to and communications with new devices
  3. Management of interactions across channels

This sounds similar to the reasons driving insurers’ modernization efforts, i.e.,  to provide seamless access to information and technology-driven resources to internal and external users .

However, as important as integration is to the success of the initiatives, survey respondents ranked it  “seventh on a list of 10 potential investments”.  It was beaten by CRM,  Analytics, and decision management.

Alignment is IT’s issue …

Forrester concludes that there is an alignment problem and that, rightly or wrongly, IT may pay the price:

“IT leaders and marketing leaders disagree on who owns these decisions, with marketing leaders claiming ownership more often than IT gives them credit for… We believe the difference represents the episodes in which marketing leaders, frustrated with IT’s inability to serve their needs, take their IT spending on systems of engagement to outside agencies and consultants.”

Forrester recommends IT organizations take specific steps to address this, which include staying clearly focused on critical technical functions, such as “providing integration, security, content management, and other foundation services, as well as project management support”.

 What do you think?

What is now referred to as Information Technology began as the “Data Processing Department” which was the central, integrated repository for corporate data.  The primary function of the group was to provide cuts of these data to business users in an accurate, timely fashion.  It sounds like this is a core competence that today’s business users want to rely on, albeit with much larger and complex data sets, and with seriously compressed time frames.

We’d like your thoughts.  Are systems modernization projects being threatened by integration – especially data integration – issues?  Should IT be taking a leadership role in providing solutions?

Leave your comments below.  We’ll pull them together.

Social Media Trending Sideways – Is That A Good Thing?

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Back in 1999, Homer Simpson’s daughter Lisa told her father that she could show him how to order pizza over the Internet.  Homer replied:  “The internet? Is that thing still around?”  The Internet had gone beyond the initial hyper enthusiasm into a steady state presence that fell below Homer’s radar.   We’re increasingly seeing anecdotal  information that Social Media is approaching this same level of maturity, which allows more intelligent planning and utilization for insurers and brokers.

We’d like your thoughts.

Social can be an end in itself, but is this business?

As with the early Internet, insurers and brokers are attracted to any medium that seems to be attractive to consumers.  Many of the early social media initiatives were designed to get new prospects by seeking ‘likes’ on Facebook pages.  Back in May, we posted on this approach and quoted an agent who reported results from his efforts:  “Likes went up 50% … but quote activity died.”  Clearly ‘Likes’ and ‘Income’ are not perfectly correlated.

We also saw (and continue to see) a number of insurers looking to use social tools for internal communications.  There have been a number of success stories initially.  However, some reality has set in there as well.  As reported in Insurance Networking News, a recent Towers Watson survey of firms found that 40% if those using social internally found the social tools to be cost effective and only 30-40% of respondents rated the social tools as highly effective.  These percentages are not bad, but not perfect.  Social is only one tool in the communications arsenal.

The lessons here are that business-oriented, data driven discrimination is required to select effective external and internal uses for social.

Hiring Socially

As with the early Internet days, senior business (and technology) managers have been feeling overwhelmed with the onslaught of socially related pressures, requirements, etc.  Some have responded by hiring social media ‘subject matter experts’ to be the resident go-to guru on all matters social.

Others have taken a slightly different tack, by adding social media expertise to the list of position requirements.  So, for example, a new marketing analyst might be expected to bring expertise in designing campaigns using both traditional and new media.

In a recent Information Week article, Nathan Freitas, marketing director, engagement, at Salesforce.com was quoted saying, “In the future, I see jobs moving away from including ‘social’ in the title as it becomes more ingrained into our jobs.”

What do you think?

Do you think that social applications should continue to be new and handled in a unique fashion in your organization, or should they being assimilated into the mainstream?  Are you in favour of bringing in employees with specific social skills, or are you looking for your employees to bring these as one facet of their profile?

We’d ‘Like’ to get your feedback.

Analytics Getting Operational In Intelligent Claims Processing

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Analytics capabilities are seen by insurers as essential tools for intelligent claims handling, so much so that technology suppliers are moving to embed analytics offerings within claims administration systems.   Two leading experts, while underscoring the value that analytics can bring to claims handling, offer a cautionary note about over-reliance on silicon tools to the exclusion of the skilled and experienced, carbon-based  forms.

We’d like your thoughts:  Can data and analytics improve claims handling in your organization?

Embedded analytics and modern administration systems

Back in April, we used this space to describe a trend towards embedding analytic capabilities into production systems.  The driving impetus was to increase the utilization of the analytics as decision tools by knowledge workers.

Technology suppliers are recognizing this trend and are finding business opportunities as a result.   A recent example was the purchase of Millbrook, a data management and business intelligence solution provider, by Guidewire Software.

While the acquired technology will be available to non-Guidewire customers, the main focus is to embed the technology within the Guidewire suite and and integrate the data.  Quoted in a release announcing the purchase,   Jack Plunkett, senior field consulting director, Guidewire Software and co-founder of Millbrook said,  “Our approach creates a BI foundation for embedding advanced business intelligence into the day-to-day workflows of insurance professionals.”

Analysts concur that this is a direction for the future.  Concerning the Guidewire/Millbrook deal, Gartner’s Kimberly Harris-Ferrante, told Insurance & Technology, “Embedded analytics is a characteristic of the next generation of insurance systems”.

The opportunities abound, when integrated with human factors

As important as analytics are, beyond software, there is a second point of integration that is more critical:  Human integration.  Independent consultant, Mark Gorman recently worked with Stephen Swenson, insurance development executive at SAS on a report for claims executives on how to expand analytics usage.

In an interview with Carrie Burns at Insurance Networking News, Gorman and Swenson consistently cited the importance of analytics as support for, not replacement of, skilled claims professionals. “We have to make sure we have the right people focused on the right decisions,” Gorman says. “This is where predictive analytics is being used to support decision-making, not to replace it.”

A big part of this is to help seasoned claims professionals understand the value of the analytics.  Making the technology easier to access (by embedding it, e.g.) is one technique. According to Gorman, “Providing automated information and decision support to get them up and running and productive faster is increasingly becoming a driver in the market.”

Claims professionals frequently see  the value of data because they tend to have a broader vision of how the data can help them do a better job.  Gorman notes, “we’ve been able to find out that there’s oftentimes more vision than people within the organization know because they just haven’t asked the question and removed the constraints.”

At the end of the day, people will make or break any system, and people need time and help to understand the value of the system.  Gorman says, “If ‘believership’ can be built with the people who are responsible for the operations and processing of the organization, true change starts to take place.”

What do you think?

We may be just at the beginning of the golden age of data in insurance.  What to you think this will mean for claims?  Will embedding the technology help?  How best can knowledge workers be supported.

Give us your analysis.

 

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