Archives for June 2011

Hey Facebook: I’m Not Liking It

I shouldn’t admit this, but Facebook makes me queasy. I recently killed my personal Facebook account that the Class of ’83 Reunion Committee begged me to create.

Maybe it’s my unwillingness to finally be found by all those weirdoes I spent most of my high school years trying to avoid. And unlike LinkedIn, which focuses on my professional resume, on Facebook I’m supposed to put personal pictures and photos up on my wall, for all to see? I don’t think so.

Or maybe it’s the Like buttons, which have transformed “Like” into an action verb.

They remind me of second grade, where clandestine notes were used to figure out if someone “liked” someone else. As a lovelorn youth, I once tried to innovate this process by folding my note into an airplane and flying it to my target in the middle of class. Only it landed instead at the feet of my teacher, Mrs. O’Brien. She unfolded my plane, read my amorous profession silently, and handed it back to me. The answer to my question—if I ever got one—is lost to history, while the shame of my failed special ops communication persists.

But now my aversion to Facebook is extending into my professional consciousness. As if sharing of personal information and capturing the cheesy Likes of millions of users weren’t bad enough, new negatives are emerging. Businesses, not just individuals, are getting into the act. Some are creating special 2-stage fan pages, where new visitors have to Like the page to see all of the content. Even worse: Some businesses are providing hard incentives to visitors who Like their content, in a cynical bid to punch up their Like count and get their messages in front of the ever-expanding networks that are forming.

Anyone who has tried to resolve the wildly conflicting opinions found on Zagat or TripAdvisor or Ebay knows that feedback from strangers is of questionable value in determining the truth about goods or services. People’s experiences are hard to compare, even simple ones. And I have found that not many people view the world exactly the way I do, valuing the things I value and discounting the things I discount. I’m also certain that competitive misinformation, spread by competitors posing as dissatisfied customers, is rampant.

Even retreating to the comfort of your hand-crafted “social network” (ugh!) does not guarantee that you’ll turn up useful, honest, actionable data. Without talking to my friends directly, I have no way of knowing why they clicked on the Like button. Was it to congratulate a vendor on a job well done? To beef up their own level of activity to make themselves more relevant? Or perhaps to get 15 percent off their next online purchase? An analytical tool of questionable value has been further devalued. I think we should all unfriend Facebook, right before Social Studies.

Count down to RDR – How ready is the UK Life & Pensions Market?

With less than 400 working days to go until ‘go live’ for the UK Retail Distribution Review, many Life and Pensions companies are deep in the middle of planning their implementation. Due to start on 31st December 2012, this legislation will introduce major changes to the way that new long-term savings and investment products are sold across the UK.

Its broad aims are to improve professional standards of investment advisors, improve the clarity around how firms describe their services, and to address the potential for commission to influence advice decisions. Practically, this means subscription to a new code of ethics including new definitions for advice, raised levels of professional education, and an end to traditional ways of charging commission for investment related products in favour of transparent fees.

Many industry analysts and commentators are already predicting structural changes within the market once consumers, armed with new information about how much they are being charged for advice, begin to shop around and start to ask tough questions about the value they are receiving from both the advisor for the advice fee paid and the performance of underlying products.

Technology has a critical role to play in helping organisations remain fighting fit in a post-RDR world.

Meeting the basic compliance needs

  • Ensure that underlying systems are able to manage both fee based services as well as commission. Both of these approaches will need to run in parallel post-RDR as the legislation only applies to investment related business transacted after the ‘Go Live’ date.
  • Ensure that only RDR compliant propositions are available for sale post 31st December 2012. Web-sites, other channel systems and channel partners all need to be changed.
  • Ensure that Platforms comply with the final set of rules on charging and rebates due to be released in Q3 this year, and offer essential services such as re-registration.
  • Update internal management reports and operational controls to track performance of business initiated both pre and post RDR.

Demonstrating value and positioning for growth

  • Developing new propositions including new channels to market, such as D2C, and access to new funds.
  • Employing innovative uses of technology to build stickier relationships with the end consumer (such as improved UIs, online tools, mobile apps and social media).
  • Transforming the cost base to compete head-on with new entrants, such as greater use of straight through processing and strategies to isolate or remove the legacy to prevent it becoming a drag on resources.

Navigating the change

  • Balancing competing priorities between now and ‘Go Live’ date – such as Solvency II, the EU Gender Directive and other internal strategic change programmes.
  • Being ready to react once the final set of rules on Platforms are published in Q3 2011.
  • Securing the investment and the team – including the right mix of capabilities to exploit the opportunities for growth.

Over the coming months, Celent will be researching the impact that RDR will have on technology strategy for organisations and evaluating the readiness of the market to implement the change. For more information or inclusion in this research, please feel free to get in contact with me.

And for those of you outside of the UK looking in thinking that this does not apply to me, beware! The European Community is revising its plans for the Insurance Mediation Directive (IMD) and Packaged Retail Investment Products (PRIPs) initiatives, and no doubt will look to see what lessons it can learn from the UK’s RDR. So, watch this space!

The Clash of The Insurance Technology Shows

Here’s an open question to the show organizers for IASA and ACORD LOMA: How are you planning to resolve the uncomfortable proximity of these two great shows?

For the record, I am a big fan of IASA, ACORD, and LOMA. All three organizations have contributed greatly to the renaissance in the insurance technology space and have opportunities to bring unique value to the industry. So it pains me to have regular conversations with industry participants of all persuasions where we all agree that there is room for two big industry shows a year, but not within weeks of each other. The current approach diminishes the value of both shows. We need a change.


I know there are financial and political considerations that conspire to keep things as they are today. Ditto that old insurance favorite: tradition. But a shakeup would have significant benefits for show organizers and attendees. Here are two options.

Option 1: Consolidate again.

If you really don’t want to address the timing issues, then you should consider combining IASA and ACORD LOMA into one massive, must-attend show. Want to be fair? Rename it “Insurance Expo” and start a new tradition that will carry us for the next 30 years.

To make the financial picture work, double the price of exhibiting and of sponsoring various events. For vendors who currently participate in both shows, this would be a net gain, as they would only be sending booths and staffs to a single location each year instead of two. And the rise in the number of attendees would more than offset the higher cost for vendors.

Attendees should pay higher fees for a single combined show, too. But will they? If you address tactical issues (e.g., scheduling to ensure adequate time for both show floor interactions and content) and raise the quality of show content by being more selective about presentations and presenters, I think they will. Heck, make it a day longer if you need to. You might not keep everyone for 3 full days, but the extended time would give opportunities for different, deeper content.

There should be consolidation benefits to show organizers, too. The logistics of a combined show would be a challenge, and I’m sure the list of potential venues would be shorter than it is today, given the combined show’s size. But the costs of a combined show would not be equal to the two shows as they are, and the staffing overhead of running the two shows would be lower.

Option 2: Re-create some comfortable calendar separation.

Most of us would be thrilled if one of the shows moved to March or October. This is not as compelling to me as Option 1, personally, but it would be a major improvement.

I know the counterpoint: March weather can be sketchy. And an October show is disadvantaged because it is out of sync with buyers who are shopping mid-year for projects that will appear in the following year’s budget. But neither response outweighs the benefits. Buyers are looking at options year round these days, and there’s as much chance of tornadoes in June as there is snow in March. I say put on two solid shows that aren’t on top of each other and people will show up.

Moving Forward

Taking either of these steps requires organizational courage. And acts of good faith on all sides to make sure that the benefits of a new approach would trickle down to the organizing groups equitably. But the current, fractured approach to keeping these two shows alive has its own risks. Uncertainty and dissatisfaction with the status quo will severely limit the growth of both shows. As member-driven organizations, IASA, LOMA and ACORD must all accept that anything that could help their members merits serious consideration. So how about it, show organizers? Can you address this nagging and obvious problem?

SaaS Activity in 2010 Insurance Software Deals

Every year, Celent conducts a survey of software providers which details the activity in the insurance automation market ( and The latest snapshot showed a 14% growth in SaaS across all categories. This increase was expected based on conversations we had last year with both insurers and vendors. It was good to get some numbers that defined the level of activity in this area. What was surprising was that billing was one of the leaders in the move to SaaS in terms of percentage of deals. Thirty percent of the reported insurance billing systems sold in 2010 were delivered through some type of hosted solution. This demonstrates both the desire of companies to upgrade their billing service and reduce the cost involved in delivering these new capabilities. Look for increased activity in this area in 2011.

The CIO perspective and adoption of social media by French insurers

On the 19th of May, Celent has organized an event in Paris whose objective was to discuss about the French insurers CIO perspectives for 2011 and adoption of social media. As the first speaker I presented the results of our 2011 French CIO report. Interestingly, almost one-third of French insurers are considering investment in social networks. Even though French insurers still need to sort out how they can leverage social networks, this is a clear sign demonstrating that value can be generated from data gathering from and customer interactions through social networks.

Generali France confirmed interests from French insurers in social media in the frame of a presentation underlining various initiatives launched recently. Among others, Generali France is tightly engaged in, an internet website based on the social network model to federate initiatives. In addition, Generali has created and been maintaining its own Twitter account for a while now and developed a very interesting social network concept called Kontsurnous. Finally, Generali France also explained how they’ve nurtured a culture of innovation within their company leveraging a LinkedIn group dedicated to Generali employees.

In the frame of the third presentation Google France explained their view on what they call the new consumer and its consequences for French insurers’ marketing strategy. Without surprise, mobility, participation, collaboration, openness represent important elements insurers need to consider when implementing new customer communication strategies.

The last part of the event was a panel discussion and a Q&A session around the different topics discussed. Plenty of ideas and interesting thoughts emerged from the panel discussion and I am already looking forward to discovering future initiatives from French insurance companies. If you want to know more about the event you can Craig Beattie’s Twitter account.