Archives for February 2012

Is It Just Me? #2: Unhappy Presidents' Day

We recently observed Presidents’ Day which honors every President of the United States. Back in the day, there were designated holidays for the birthdays of George Washington and Abraham Lincoln. Now we equally honor Millard Fillmore, James Buchanan, and James Garfield. Why?

Why are we unwilling or even unable to differentiate between great Presidents who made outstanding contributions to American and even world history, and those who were at best undistinguished? Are we afraid of hurting someone’s feelings? Or even more insidiously, do we think there is no way to distinguish between accomplishment and just serving time?

At this point, you might be thinking: “interesting point . . .” or “not so interesting point . . . but I thought I was going to read something about insurance IT.”

How many IT groups and IT vendors settle for “I show up, and do my job, and that’s enough”? How many set their sights higher, and strive to change their company and the industry for the better? How many people think about the difference, and how to make that difference real?

Augmented reality and motor insurance – one step too far?

Growing up, I was fascinated with the TV shows of Star Trek and BattleShip Gallatica. The combination of strange looking aliens, interesting planets, and tele-transportation had me captured. It is perhaps not surprising that I ended up in the field of Computer Science. And so my inner geek was intrigued at the news in the press this week reporting the impending release of Google’s glasses.

The future may be closer than we think with this example of augmented reality features moving into the real world of you and me. (Much can be said about the impact of technology on the consumer when we have to use “real” to describe the world we live in).

Through these glasses, Google will be able to project a wide range of data onto your vision of the world, including adverts. Using GPS features, the glasses would know where you are in the world, and offer up data from your social connections on buildings and business around you. Using facial recognition software, the glasses could offer social data about the person in front of you.

The cynic in me rails against the practicalities of this all. Walking down any busy street requires my full attention to ensure my safety from cabs, pick pockets and SMSing locals. How could my mind possible deal with another stream of data through the glasses overlain on this already busy reality?

And perhaps this is just too much data. Aside from the neurological constraints of the brain processing this volume of information, there are serious concerns from consumer groups about the lack of safe guards. As the NYTimes article notes, American consumer privacy groups are lobbying for the suspension of use of facial recognition software until such a time as adequate safe guards are in place. And quite rightly so.

In the world of insurance telematics, there is huge interest if little current evidence that the mobile phone could take the role of the blackbox device in future propositions. Google glasses could play a similar role in telematics as the device offers many of the features of a smartphone. This could be an example of one technology leap-frogging another in its application.

Even if you are uncomfortable with my Star Trek proposition of glasses as a telematics device, as an industry, we need to recognise that this will be another marketing channel to our personal lines customers. This presents an opportunity of the most personalised form of marketing available. As insurers get a handle on marketing in digital channels, understanding the value of marketing in augmented realities will be next.

But if for you, like it is for me, this may well be just too much information. For the moment, I will forgo opportunities of augmented reality and stick with mere reality. And maybe catch-up on old episodes of Star Trek.

3.13.12: Celent Insurance Webinar: Deal Trends & Predictions in the North American Life, Pensions & Annuities Policy Administration Systems Market

Celent CEO Craig Weber and Analyst Karen Monks This event is free to attend for Celent clients, flex-plan clients, and the media. Non-clients can attend for a fee of US$195. If you are unsure of your client status, please contact Chuck Smith at +1.617.262.3125 or Please click here for more information.

Understanding the EMEA life and pension Policy Administration System market dynamics

My colleague Jamie Macgregor and I have published the Celent’s regular report profiling policy administration system (PAS) vendors in the life and pension space in Europe Middle East and Africa (EMEA) back in November 2011. This report profiles 34 systems offered to EMEA insurers on the market. Beside this research we thought it would be valuable for our subscribers to understand our view of this market. To do so we have decided to add three other pieces of research, whose objective is to explain the dynamics of the life and pension PAS market in EMEA:

1. Deal trends: First of all we have tried to have a deeper look at past life and pension PAS deals in EMEA and to evaluate how this market might evolve in terms of size going forward. In the frame of this analysis, we have identified which vendors were having good traction in the recent past and evaluated PAS provider’s market shares. The EMEA life and pension PAS market is highly fragmented with a downward trend in terms of new deals. Therefore we expect the market to rationalize going forward.

2. Insurer’s perception: It is difficult to comprehend the dynamics of a market for a PAS provider without understanding what customers think and what are the differences of perception across regions. In this report, we identify how customer satisfaction and perception of IT vendors capabilities as well as life and pension PAS has evolved recently in three geographies: UK, Continental and Eastern Europe. Through this analysis it appears clear that PASs are not uniformly used across regions and that a core feature for a specific insurer could just be perceived to be a simple support function for another one conducting business in a different geography.

3. Functionality and technology trends: The last piece of our work around life and pension PAS in EMEA consists in providing our views on solution’s functionality and technology aspects. While the deal trends and insurer’s perception rely mainly on factual data, our view on the future of PAS in terms of functionality and features as well as technology is an extrapolation of what we have been seeing on the market over the past few years based on our discussions with IT vendors and insurers.

Jamie Macgregor and I are going to present a webinar on the functionality and technology trends tomorrow. If you are interested in joining us then do not hesitate to register here:

Which U. S. P&C insurance company will be the first to use a social network as a platform to transact insurance?

Part of the hype involved with the Facebook IPO this week is the vision of its founder to establish it as a platform for people to use when interacting on the internet. To me, this means not simply linking from the S.N. to another site, but to actually complete commercial transactions on the social network itself. For insurance, this would have a minimum benefit of avoiding tedious data entry of demographic information that the network already knows about you, age, sex, address, etc.

If you don’t think transacting insurance on a site other than that of the writing company will happen, you can stop reading now — you won’t be interested in the rest of this post. If, however, you are game to consider that a company will try this, read on and get ready to post a comment and make your pov known.

What would be the characteristics of the first U.S. P&C insurance company to use a social site as a platform for its business? Here are some considerations:

Product – Will be one of the commoditized, less differentiated products such as personal automobile, motorcycle, or dwelling: In these lines of business, price and service separate the offerings. Being able to ease the process of obtaining and maintaining insurance will be a driver.

Segment – Likely youthful: The companies first attracted to a S.N. platform will be those with prospects who are most comfortable with the environment, aggravated by traditional insurance distribution and less concerned about personal privacy.

Channel – Direct: As this new way of doing business will involve first-mover risks, it is likely that companies with intermediated distribution will pass on using the platform in the beginning. Upsetting their existing agents with a direct social network approach will be too much to bear.

Culture – Innovative: There will need to be some match between the value system of the insurer and that of the social network company. Stepping into this unknown territory will require that both parties are comfortable with their partner. Thus, insurers which have a reputation for being more innovative will be more likely to reach acceptable terms with the platform provider. Since this will probably be either Google or Facebook, the insurer with the vibe closest to “do no harm” or “hacking” will likely prevail.

Size — Not necessarily the largest: I do not think that the first S.N. insurer will need to be a billion+ organization, but I am sure that the network provider will demand some fairly steep rent and this will restrict the number of insurers able to pay the freight.

Technology – Probably not a barrier: The investment of many insurers in core system renewal should position most of them to take advantage of the open standards that a S.N. is built on.

Regulator view – The wildcard: The most likely insurer, in my view, is one that has a good reputation with the regulators and a decent reputation at addressing their concerns in past market conduct reviews and inquiries. As the response of regulation to this new way of doing business is such an unknown, the company willing to take this step will be confident in its ability to respond to its overseers.

Given these parameters, does anyone come to your mind? In days past, I would have identified the company with the pink-haired lady mascot as a leading possibility, but its recent purchase takes them off the table. It also could be one of the specialty auto insurers targeting the youthful driver market as well.

Post a reply, or email me at, or contact me on LinkedIn or Twitter and let’s knock this around a bit.

Technology, innovation and insight in insurance

Last week we held the innovation and insight event in Boston where we discussed creative disruption and emerging technologies and their effects on the insurance industry. Since coming back to the UK a few press releases and blog posts have caught my eye that feed well into this discussion. The first is from Robert Scoble, among other things a technology commentator and blogger. His post, 2012 brings a pause in the disruption sounds contradictory to our view but a quick read of his post provides a great view of the level of change we’ve seen in the last 8 years. Think back 8 years, to the phone you had, the way you interacted with the Internet – with the TV even. In the last 8 short years we’ve seen the birth of the social web, the rise of the smart phone, of apps (and their stores and markets), of gesture based interactions (the Wii and then Kinect were launched in this timescale) and now the IPO of facebook which launched in 2004. The pause in disruption points to a lack of jaw-dropping disruptive technology at the start of 2012 and a consolidation in the industry, a refining of these hugely disruptive themes into concrete business models and a maturing therein. I have to agree. CES 2012 saw bigger TV’s, TV’s with gesture control and further merging of mobile, tablet and laptop devices. Even Apple, the great innovator, presented the iPhone 4S as something they could ship in huge numbers rather than go for massive change. One technology I would watch is 3D printers, which are still gaining ground slowly but mostly in geek and maker communities – given another decade and cheaper prices I think this will seriously disrupt insurance and retail models. For now, we may be waving phones to make payments and having screens we can bend and see through – but consumer electronic developments in the last 12 months lack the technological disruption of past years. This pause is good news for the insurance industry in that makes this the perfect time to step back, take a look at the opportunities and possibilities these great waves of change have on our business models, our products and the way we interact with customers. Insurers across the globe have already made great strides in interacting with customers through social networks and understanding how to leverage them. Insurers are also experimenting with apps, mobile and connected devices. Telematics looks set to enter the mainstream in many markets, where the question is less how should we do it but now which method. It was interesting also to see these articles regarding AXA, repositioning it’s brand as innovative within the UK, making use of social technology and games to educate businesses on the value of insurance. Perhaps not the first insurer, but the articles are indicative of recent and continued investment in this theme from the insurance industry. The recent past – whether you call that 8 years, a decade, two decades – this short time has been an incredible period of change, insurers are already disrupting their industry and Celent contends there is no better time to review how the industry can leverage adoption of emerging technologies to creatively disrupt not only their internal perceptions and process, but the entire market.