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?