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To view the English version of this article, click here.
Hiroshi Yokotsuka

Hiroshi Yokotsuka

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2つの果実:「奇跡のリンゴ」と「抜本改革」

2つの果実:「奇跡のリンゴ」と「抜本改革」

今回は、東京海上日動火災保険株式会社の常務取締役でCIOの横塚裕志氏より、セレントのブログに寄稿いただきました。
 
To view the English version of this article, click here. 
 
Hiroshi Yokotsuka

Hiroshi Yokotsuka

 
 本日は、日本で「奇跡のリンゴ」と呼ばれる物語と、東京海上日動の「抜本改革」の話をしたい。
 
 
 
 
 

 アダムとイブ、万有引力、ウイリアム・テル、iPodなど、これまでリンゴは人類にさまざまな試練、発見、感動、楽しみをもたらしてきた。今また一つ、日本の北のはずれのほうで、リンゴの木と一人の老人が新たな奇跡を起こした。

 今日のリンゴは、ニュートンが見たそれとは全く別物である。数世代にわたる品種改良と優れた病害、害虫対策により、立派で、甘く、大きな実をつけるようになった。特に日本で作られている高級なリンゴは、皆さんが欧米のホテルのロビーで見かけるものの倍近い大きさがある。

 その代償として、現在のリンゴは大量の農薬、肥料、丁寧な除草なしでは、1年も経たないうちに枯れてしまうほど脆弱なものになってしまった。リンゴを無農薬で育てるのは不可能であるというのが農家の常識であった。少なくとも木村氏が挑戦するまでは。

 木村氏は現在60歳。20年前にリンゴの無農薬栽培という、当時の常識からは無謀とも言える試みを開始した。

 その困難は、木村氏の想像を遙かに超えていた。手作業で害虫を取り除き、消毒薬の代わりに酢やワサビの溶液を撒いたが、葉は害虫に食い荒らされた。

 6年間、考えられることを全て試してきたが、リンゴの木は実を結ぶどころか花を咲かせることもなく、衰弱し、枯れていった。

 万策尽き、精神的にも経済的にも消耗しつくし、ついに自殺を決意して山中深く分け入った木村氏が見たものは、農薬も肥料も与えないのに力強く育っている木々の姿だった。

 リンゴを作っているのは人間ではなくリンゴの木である。人間の都合ではなく、リンゴの木が本当に気持ちよく実を作れる環境が必要だ。この当たり前のことに気づくのに6年かかった。人間が一人では生きていけないように、植物もそれだけでは生きていけない。森の木々は、害虫も益虫も(これは人間の定義である)、雑草も雑菌も(これも人間の定義である)、ヘビも蛙もミミズも一緒になって、絶妙のバランスを保って生きている。

 木村氏は自分が何をしにここに来たかもすっかり忘れて畑に走って帰り、それからはどうしたらリンゴが気持ちよく果実を作ってくれるか、それだけを考えて畑を作り替えた。その畑は様々な草が生え、多くの虫やヘビやカエルや動物が棲む、雑然とした、しかしリンゴの木にとっても人間にとっても大変心地よい環境になった。そこで創られるリンゴは言葉では言い表せないほど滋味に溢れ、現在では入手が非常に困難である。そのリンゴを使った料理を出すレストランは、1年先まで予約が埋まっている。

 

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東京海上日動は、その保険のほぼ100%を代理店が売っている。しかし、お客様と接し、保険を売っているのは代理店であるというごく当たり前のことに気がついたのは、つい最近のことである。それまでは代理店は、会社の都合で作られた複雑な保険商品を、会社が考えた煩雑なプロセスで、社員の目線で作られた使いにくいシステムを操作しながらお客様に販売していた。

 

2004年にスタートした「抜本改革」は、代理店がいかに気持ちよく仕事ができるかを徹底的に追求したプロジェクトである。会社の都合で複雑化した保険商品・特約を半分にそぎ落とし、プロセスを根本から見直し、代理店の目線でシステムを全面的に作り直した。

 

現在では、商品、業務プロセス、システム、社員のサポート、そして代理店自身の自律的努力が絶妙に調和し、代理店にとって心地のよいビジネス環境が生まれつつある。それは、言うまでもなくお客様にとっても心地よいカスタマー・エクスペリエンスを提供する原動力になっている。

 

東京海上日動の「抜本改革」もまた、木村氏のリンゴに優るとも劣らない果実を実らせつつある。

Japanese Insurers Poised for Technology (r)evolution

Japanese Insurers Poised for Technology (r)evolution

In Japan, Internet banking and online brokerage have been around for some time. The Internet revolution is taking a bit longer to come to the Japanese insurance industry. Currently, most insurers’ web sites are limited to providing information and some online tools, such as premium calculators or financial planning simulators. Customers who want to actually buy some insurance are directed to call a contact center, which will then mail application materials to the customer. In 2008, though, two firms–SBI AXA Life Insurance, a joint venture between Softbank Investment and AXA; and Lifenet Insurance, a greenfield firm– began to offer fully online insurance sales for the first time in Japan.

But for the most part, the insurance industry here has yet to realize the benefits of Internet-era communications in reducing processing cycles, supporting agents, or improving customer service. Here and there some new technologies have been adopted—some firms have built basic agent extranets and offer some online policy and claims information to their customers. The basic building blocks for a more integrated insurance infrastructure, however, are not in place. SOA is in its infancy in Japan, and the use of standards is limited. “Business intelligence” software generally takes the form of embedded Excel spreadsheets used by analysts and underwriters in lieu of more efficient assisted workflow solutions.

Change is on the horizon, however. Japanese insurers have seen foreign entrants succeed in taking large chunks of their market share, particularly in new product areas like retirement and health products. This has focused their attention on some of the techniques used by the foreign entrants, such as the BI used to support direct marketing, and more flexible core systems.

Due to a long-term trend towards declining market size—a result of the country’s shrinking population–Japanese insurers are also under intense pressure to reduce costs. This is driving even large domestic insurers for the first time to consider international vendor solutions and even outsourcing. As insurers move towards more modern, flexible PAS and claims systems, they will look to update their infrastructures, introducing more remote channel capabilities for their salesforce and agents as well as their customers. We expect the technology landscape at Japanese insurers will be transformed steadily, and in the end significantly, over the next few years.

Technology enabled claims

Technology enabled claims
Last month, I was invited to speak at the Insurance Times Claims Clinic in London. A key theme of the event was how to improve the claims process. It is our view at Celent, that looking at the industry as a whole, there is a very uneven use of modern claims technology. We’ve covered this topic in a greatreport that talks in detail about the different types of tool available to insurers for this key process. Being a business audience, I kept it focused around the benefits. We’ve estimated that careful use of technology can take out 4 or 5 points in the combined ratio. That’s very compelling. In a roundtable discussion after the event, it was clear there is still concern about ambitious IT projects and their likely success rates. As technologists, this is something we need to manage aggressively and continuously. It’s only through a collaborative partnership with the business, can we be successful. Future developments are unlikley to even out the use of technology in claims. Some insurers will have to play catch-up. Others will deepen their understanding and broaden their use of the functionality their claims systems provide. Both types of insurers will find their own variation on the theme of using fewer resources to restore claimants to their prior state quickly and fairly. Celent’s research shows investment in technology this year will continue, with longer decisions cycles and more focus on the business case. Now is the time for careful, targeting investment in claims technology in the organization. For more about the event and my presentation, check out http://www.insurancetimes.co.uk/story.asp?sectioncode=13&storycode=376970

Answer the emails before you Twitter

Answer the emails before you Twitter

If you think twittering is for the birds, then think again. US President Obama and Stephen Fry (a renowned British actor) are both active users of the micro-blogging website – twitter.com. Earlier this month, Stephen Fry was stuck in lift in London and used Twitter to talk to his followers – all 180,000 of them – about his predicament. Ever helpful, his followers offered advice on surviving in broken lifts and generally uplifting comments. Welcome to the world of social networking.

But it’s not all fun and games. Recently, a US congressman took to announcing in detail his movements on a visit to Irag. This caused an outrage over the unintended security risk he caused for himself and his delegation.

Companies are using Twitter for their own purposes. You can follow the CEOs, hear what employees are saying about the company or interact as a customer. Twitter has caught onto this corporate surfing and has made mutterings about charging corporate users. Clear benefit of this channel remains unproven and such a move would certainly dampen corporate interest.

In the corporate world, Twitter is said to be able to play a role in customer feedback, queries or product questions. However, these activities could just as well be served in on-line forums which are better at structuring and associating data. Twitter boards can sometimes look like random streams of the unconscious that can only make sense to the Twitter owner. Most companies will allow you to submit queries to them via email but either don’t respond, or respond in a useless timeframe. I’d happily use alternative channels (email, twitter, skype) to communicate with companies instead of having to deal with those interminable call centres. But then the company must actually respond.

The Wall Street Journal noted “… some users are starting to feel ‘too’ connected, as they grapple with check-in messages at odd hours, higher cellphone bills, and the need to tell acquaintances to stop announcing what they’re having for dinner”

I’m with WSJ on this one. Twitter is yet another communication channel in an over-communicated world. The technology may be a viable consumer communication channel but it competes with alternative and more established channels. My message to firms considering this is to get your other channels working first.

The Long and Short of Your IT Portfolio

The Long and Short of Your IT Portfolio

A lot of interesting ideas emerged during Celent’s CIO Roundtable and Model Carrier Summit last week. (See Mike Fitzgerald’s excellent synopses of both events here.) One of my favorites came from a CIO panelist, who framed his rationale for IT project investments in terms of their intended payback periods.

“You’ve got to have some long projects in your portfolio, or eventually you’re going to find yourself hopelessly out of contention for the affection of your customers and agents and brokers,” he said. “But you need some short ones too—things that have a six or nine month payback period, where you can make some progress that will show up on your bottom line in a hurry.”

In the context of the current financial crisis and the microscope that many insurers live under, this idea has never been more important. If you made the 9-month payback your sole project approval criteria, what would you be left with? Cleaning up commission reports, making subtle tweaks to your portal, and maybe improving minor flow issues on your customer service UI. All good ideas, but hardly enough to get you on the radar of independent agents/brokers, especially. And certainly not an effective long-term lever if your goal is to double back office productivity.

On the other hand, should you be betting the farm on $100 million, 5-year policy administration replacement projects? In the words of an old boss of mine, “We could all be dead in five years!” I think his point was that anything beyond the 12 month mark is suspect because, well, stuff happens. Not “might happen,” but “happens.” It just does.

In the perfect world, you can cycle the gains from your “short” investments back toward your “long” portfolio. Those nine-month projects should be delivering savings just in time for your next budgeting cycle.

But we expect that scenario to get harder this year, for two reasons. First, CFOs are getting wise to the game. When you send them a business case with a payback starting in month six, many now expect to actually capture those benefits from month seven forward. Unlike the good old days, just because you save the company some money, don’t expect that it will become your division’s slush fund.

The second reason is that most companies are committed to an SOA vision, where reusability is key. This means that the field of play for short projects is shrinking, or at least morphing toward longer projects. One-off solutions—no matter how smart they sound or how much money they save—are on the path to rarity, if not extinction. Of course there are still savings to be found as SOA infrastructure is developed. But those savings are probably the cornerstone of your larger projects and shouldn’t be double counted.

The Web 2.0. attitude and the insurance industry

The Web 2.0. attitude and the insurance industry

When discussing with most of my friends about my job and the insurance industry, I am often told that insurance is not interesting or is one of the least innovative sectors among the financial services industry. Of course, I don’t agree with them and sometimes I have to argue fiercely to demonstrate that their perception is exaggerated. Web 2.0. and its related-technologies are good examples where some insurance companies have already launched interesting initiatives. Based on contacts I have established so far, I have decided to work on a research, whose objectives are to provide some examples of Web 2.0. initiatives launched by insurers and to understand how the sector perceives and evaluates the value of Web 2.0. initiatives in the long-run. While the first objective seems to be relatively easy to achieve, I expect some difficulties with the second one.

In a report published last year called “Capturing the Strategic Value of IT: A Review of IT Investment Evaluation Methods”, I have tried to analyze how insurers can prioritize IT investments and better evaluate the strategic impacts these types of investments can have on their business. Some projects related to social networking launched by insurers are typically the kind of investments, where the question of value is of highest relevance. Of course, entering the blogosphere or a presence in Second Life contribute to launching a signal of modernity and dynamism to potential clients. But do these initiatives really generate new sales or can the new perceived image of an insurer following such initiatives indirectly trigger more referrals? How do insurers evaluate the results of these projects and what factors and criterias are particularly important to them when deciding to adopt the Web 2.0. attitude? Even though insurers’ Web 2.0. initiatives give me some interesting stories to tell to my friends when they tease me about my job and the insurance industry, they do not answer the most important question: what value can they bring to insurers? You will therefore understand that I am very excited and curious to hear what CIOs, marketing managers or other people responsible for such projects within insurance organizations will tell me when I will raise this question! My expectations are high and I hope I will be able to provide interesting findings to my future readers.

When Hog Meets Car

When Hog Meets Car

Three cheers for my auto insurer, which gets unexpectedly high grades for a claim experience. (And no, for you conspiracy theorists, they are not currently a Celent client.) I recently had the misfortune of introducing the front end of my 3000-pound car to a 200-pound wild hog. At highway speed, it wasn’t good for either of them. But my car is insured, at least. While I wouldn’t wish the experience on anyone, some good news about our industry crept into the story. Witness:

  • A pleasant FNOL. I literally called my insurer as I was driving home from the hospital, and 10 minutes later the claim was in process. The reps on the phone were empathetic, helpful, and knowledgeable. Coverages, deductibles, and repair options were all sorted out promptly. Grade: A-
  • Quick action on the fix. Even though my car was towed to a non-company lot, my insurer arranged to have it brought to their local repair facility, free of charge. Of course it was worth it to them to have better control over the repair, but it was also easy for me. Grade: A
  • Updates every three days for the duration. How did they know I would have called them several times to make sure my car would be returned to me promptly? Experience probably told them, and they swapped out my inbound calls for some proactive outbound calls that they controlled. Smart. Grade: A+
  • Good execution. The car was ready when they said it would be. It had two minor issues, so I’ll ding them for quality control. But the claim center reps jumped to resolve the issues quickly, which prevented a blight on an otherwise great experience. Grade: B+

From an analyst’s perspective, I think this is a triumph of technology, process, and customer psychology. Like many consumers, I’m suspicious what will happen to my premiums at renewal. But for now, I’m telling my friends and family that my insurer knows why I pay them.

National Underwriter Magazine on SOA

National Underwriter Magazine on SOA
There’s a good article in this week’s National Underwriter about the use of SOA (service-oriented architecture) in the insurance industry. It features a lot of my thoughts about how SOA can be leveraged (and how it can be confused) as well as some great comments from other industry analysts. Check out the article: “SOA Widely Used, Though Misunderstood” One thing I’d add to this piece is that I do think SOA has the power to be a transformative technology in the insurance industry. Just because most insurance SOA projects provide benefit through better internal integration doesn’t mean there aren’t future steps that will bring it to the next level of value.

Wishes for 2009 From a European Insurance CIO

Wishes for 2009 From a European Insurance CIO
Celent has the chance to be continuously in the heart of insurers’ preoccupations. Knowing how difficult it is to make optimal decisions in order to thrive–especially in today’s environment–keeps us informed about the hurdles to overcome. Today we are proud to share with you the wishes of a European insurance CIO, Guy Malherbe from Les Retraites Populaires. Thank you Guy for your contribution.
In 2008, life insurers were deeply impacted by the financial crisis, especially within their wealth management divisions. Nevertheless, some insurers were very successful in generating new premiums thanks to their financial stability and low exposure to risks (e.g., sub-prime, hedge funds, etc.). That was one of the paradoxes of this crisis. Collateral effects for these “lucky losers” have been moderate, even for the IT divisions. But Operational Expense and Capital Expense IT budgets for 2009 have been reduced due to the bad economic climate, which I believe will last at least one more year. So, technology executives in insurance will have to face the dilemma of “doing more with less.” As I am one of these, my goals for 2009 are:
  • Ensuring business continuity. IT services are part of the core business of life insurance. They have to be reliable and powerful to support day to day business, even in the worst cases like this economical crisis.
  • Focusing on short-term customer needs but maintaining a long-term perspective. Customers are anxious about their investments and need to be reassured. They are looking for stability and low-risk financial products. Life insurance could be the right answer if we invest in building trust-based and lasting relationships with our customers that help to restore confidence in financial products.
  • Keeping faith in the future and welcoming the “Internet generation” by implementing innovative life e-insurance services and advice. The Internet generation is getting older and will soon be interested in life insurance products. Insurers must be prepared to fulfil their needs by offering new ways of managing “virtual” relationships with this promising segment of “e-customers.”
I am sure that 2009 will be a challenging year for life insurance CIOs, but it will also bring with it a lot of great business opportunities.