- Where Insurance & Technology Meet

Latest Stakeholder in Major Systems Projects? The Consumer

Before final sign-off on major projects, senior executives usually extract promises (accompanied by career-limiting threats) from the project manager or executive sponsor to the effect that the company will not have to repeat the exercise for many years.

What would happen if the response was “Actually, we’ll have to check with our policyholders first”?

Becoming a Next-Gen Insurer

Last week, at their annual summit, the good folks at analyst firm SMA Strategy Meets Action introduced a model that they have been working on for sometime: The Next-Generation Insurer.  This model helps insurers understand the environment based on a consumer-centric view and facilitates priority-setting.

Opening the session, SMA Founder Deb Smallwood made it clear that the model’s outside-in view forces practitioners to understand that “this is the end of the old way that we’ve done business.” The annual planning process “can’t just update last year’s plan,” Smallwood said.

But what does this mean for major systems? The answer that came out from subsequent supplier and practitioner speakers was “Plenty.”

Major systems for consumers

In the not-too-distant past, systems providers and IT controlled frequency of changes to the major systems.  This has taken a 180 degree turn.  Consumers now set the tone.

SMA Partner, Karen Furtado convened a panel of systems providers to discuss adaptation of system investments.   The consensus was that suppliers had relinquished control to two groups:  their direct customers (the insurers) and the insurer staff who interact with the consumer.

Phillipe Lafreniere, from core systems supplier EIS Group, noted that insurance consumer has fewer contacts with insurers than with other suppliers such as banks, retail merchants, etc.  As a result, Lafreniere suggests that insurers have to make the most out of the ‘moments of truth’ with consumers.  To support this, core systems have to support three elements of engagement:

  • Connectivity – access to full customer file on all contacts
  • Convenience – support ease of doing business
  • Context – determining what surrounds facets of the consumer interaction

Jeff Wargin from Accenture Duck Creek took a slightly different tack.  As important as technology is, maintaining highly qualified customer focussed personnel is critical.

Wargin gave an example of a system that was ran on a 20 year old technology base.  This insurer was able to continually upgrade the functionality because the original design was extremely flexible and the programming/business analyst staff were expert in working with users, allowing rapid changes based on consumer demands.

First we fail ….

In a subsequent session, Furtado brought practitioners together to discuss advances beyond core transformation.  The major lesson: failure and flexibility are critical success factors.

Meredith Barnes-Cook from Liberty Mutual  is a business executive who has spent significant time implementing major systems.  Barnes-Cook noted that in her first assignment she hit problems early but got a ‘mulligan’ from her management. This allowed her to lead the team to success with a deeper understanding of key enablers, one of which is the effective use of business analysts to incorporate end-user and consumer requirements.

The other panelist was Pascal Lavoie, CIO at Industrial Alliance, a Quebec direct writer.  Like Barnes-Cook, Lavoie took the lessons of a failure in 2005 to spring board to success in 2013.   Lavoie stressed that the key to success is business / consumer orientation embodied in Executive Leadership,  Project Structure / Culture, and Vendor Partnerships.

Look all the way around and bury the old saw

Another SMA Partner, Mark Breading noted that a recent poll of SMA insurer clients found that 85% had strategic initiatives around customer experience underway. Breading counseled insurers to ensure that processes and systems be built to take a 360 degree view which incorporates: relationships, interactions, lifestages.

The consumer focus triggered a redux of an on-going debate:  Who is the customer- the insured or the agent/broker.

The consensus from all the debate that followed (and there was plenty) was that the policy holder is the customer;  the agent/broker is the partner.

Is this discussion over now?

What do you think:Are these isolated cases?

Full marks to SMA for providing excellent content supporting thought leadership.  The tacks taken by the participants are clearly on the cutting edge.  However, in hallway conversation, I found that most attendees were already putting some of the constructs into production and are looking for more.

Are you adding the customer to your list of key stakeholders?