September 11, 2015 by Leave a Comment
Celent and Asia Insurance Review hosted the 5th Asia Insurance Technology Awards (AITAs) at AIR’s CIO Technology Summit at Le Meridien Hotel Jakarta on 1 September 2015. The AITAs recognize excellence and innovation in the use of technology within the insurance industry. This year we received over 30 nominations from Australia, Hong Kong, Taiwan, India, Sri Lanka, Indonesia, and Pakistan; as well as the Asia Pacific divisions of global insurers. There were many impressive submissions, from which our international panel of Celent insurance analysts selected the very best to receive the six awards. The Innovation Award recognizes innovation in business models or in the use of technology. The winner was MetLife Asia. MetLife Asia implemented Advanced Data Analytics to transform big data into customer insights and to deliver a more personalized customer experience – delivering the right products and services, for the right people, at the right time. They are using these insights to inform product and services development, and to deliver sales leads to agents. The company won the award because of the innovative usage of data analytics. The IT Leadership Award honors an individual who has displayed clear vision and leadership in the delivery of technology to the business. The recipient will have been responsible for deriving genuine value from technology and has demonstrated this trait with a specific project or through ongoing leadership. The winner was Girish Nayak, Chief – Customer Service, Operations and Technology at ICICI Lombard General Insurance. ICICI Lombard implemented a business assurance project to address the ever present gap between real business uptime on the ground vs technology uptime. The firm implemented an in-house customer experience center; and deployed an infrastructure as a service model in Microsoft Azure Cloud. These initiatives generate genuine value for the business. The Digital Transformation Award honors an insurer who has made the most progress in implementing digitization initiatives. BOCG Life was the winner. BOCG Life implemented the Electronic Commerce System to provide online needs analysis and policy services. Through a transparent, direct and needs-oriented process, it facilitates prospective customers applying for multiple products they need in one go, and allows customer to adjust the offer according to their budget. The company won the award because of the way it is building trust and developing long-term relationships with customers through digital transformation. The Best Newcomer Award recognizes the best new player in the insurance technology field. The winner was CAMS Insurance Repository Services. CAMS Insurance Repository Services launched the Insurance Repository to provide e- Insurance Accounts to maintain policies as e-policies. This brings new efficiencies and benefits across the stakeholders, including Policy Holders, Insurers, Agents and the Regulator. The company won the award because they demonstrated real, unique value to the ecosystem. The award for Best Insurer: Technology honors the insurer who has made the most progress in embracing technology across the organization. The winner was RAC Insurance. RAC Insurance implemented a series of projects to digitize the business between suppliers, members and RAC Insurance. These projects include Claims Allocation, Motor Repairer Integration, and a B2C platform. The company won the award because of the way technology transformed the organization’s capability by offering an exceptional, one-touch experience for their members through online channels. Finally, the New Business Model Leveraging Mobile Applications Award recognizes the insurer who has developed a new, perhaps disruptive business model involving the innovative use of mobile technology. Max Life Insurance won the award. Max Life Insurance launched mServicing and mApp which enable digital servicing of customers, sales force and operations. The company won the award because of the use of mobile technologies to increase agent activity and engagement, enable speedy issuance of policies, and enhance business quality and operational efficiency. Be on the lookout for the 6th Asia Insurance Technology Awards in 2016. We’ll post another blog when the nomination period opens, sometime around June 2016. You can also find information on Celent’s website: http://www.celent.com/aita.
August 28, 2015 by Leave a Comment
There are lots of cues and clues to differing cultures across the insurance industry and it’s IT neighbour – one of the most obvious is dress code or at least communal agreement on how one should dress. For a chap in London it should be relatively easy, as the character Harry Hart put it in the film Kingsman, “The suit is the modern gentleman’s armour.” However, recent changes and external influences in London have left me in something of a wardrobe quandary. For example – the data scientist community and the digital community. I went to the first Strata event in London in my usual suit and tie and swiftly realised that I looked like I a fish very much out of water. Here jeans, t-shirts and the odd tattoo were the order of the day. My most recent visit to the conference I managed to correct my attire although didn’t acquire new tattoos just for the conference (perhaps next year). Oliver Werneyer’s observation at our event in February this year that one needs a good beard to fit in with the start up crowd is also well founded. Also in London we have Lloyd’s of London with a strict dress code and a requirement for a tie to be worn at all times. More Kingsman territory, clearly one can’t dress for both communities on the same day. In between we have an increasingly relaxed view of the suit attire or even simply trousers and shirt. Despite having a pretty good collection of ties these are now largely optional (although I still generally carry one around as wearing them varies by client and frankly I quite like wearing a tie to a meeting). What I don’t have of course is a pocket square – something I rarely have seen adopted before this year (perhaps I wasn’t paying attention) but I’m increasingly seeing a square used to add a splash of colour in the absence of a tie. Thus, we have the title of this post – I have nothing to wear! Fortunately, London is unlikely to see the weather required for hawaiian shirts and shorts to become the order of the day (albeit I may have something that might fit that bill should it come to pass). Circling back to culture though, the need to blend these clearly different and shifting cultures together in one organisation is crucial in a modern insurer. Aviva has gone to the extent of creating a digital garage in Shoreditch – the heart of the jeans wearing community, if I may use such a broad brush – to draw in talent to the organisation. Hiscox too has been going to great pains to attract the right talent, along with many other insurers in London seeking to bridge these cultures. Are you allowing for a varied culture in your organisation? How flexible are you in dress code and working practices across different communities? Have you ever set to preparing for a meeting and realised you simply have nothing to wear? Would love to hear your stories on changing insurance, if only so I know it’s not just me.
July 1, 2015 by 1 Comment
Today’s blockbuster announcement of Ace buying Chubb will have a lot of industry ramifications—some of which will play out in the IT sphere. No doubt there has already been an IT assessment element in each insurer’s due diligence efforts. Between now and the effective date of the merger, there will be a lot of planning focused on:
- Efficiencies and platform rationalization–aka “let’s figure out what is the right number of core systems, which core systems will be the survivors, and how data conversion and integration will work”
- Cloud, SaaS, data management/stores, and analytics
- Professional service and SI support capabilities that can scale to the new Chubb
- Which systems will best support a digital roadmap
- Design highly configurable and agile systems that feature ease of integration
- Have enough scale to meet the needs of bigger and bigger insurer customers—grow, merge, or wither
June 26, 2015 by Leave a Comment
I love spotting ironies such as how this years Strata | Hadoop World conference (the UK one) spent more time discussing Apache Spark and whether it was a successor to Hadoop or another tool in the box than it did discussing Hadoop and it’s applications. It was great to see members of the insurance industry there amongst the retailers and banks as well. “But wait?!?!!” I hear you say, “Hadoop isn’t all that old is it?” Herein lies the great challenge for the CIO faced with requests for open source tools. These are dynamic, social projects without the same stickiness as those legacy systems insurers spend time worrying about. Not only do users / consumers / fans of open source software shift between projects but the contributers / developers do too. With the rising use of tools like R, Python, Linux, GIT, Hadoop, Spark, Docker, Capistrano and all manner of wacky projects on the go and being adopted by insurers how should a CIO respond? Prohibition tends to lead to shadow IT and surprises down the line far more unwelcome than managing some new software. The key advice is to understand these types of projects can be more transient than other enterprise software. Experiment with them but be careful of expensive, enterprise installations that are hard to extract later down the line. In truth insurer adoption of some of these technologies will outlive the fashion for them but it still requires planning for their removal or worst case, their ongoing support. I promised analytics in the title too didn’t I? Well Spark is all about real time analytics and is having an interesting impact in the machine learning and predictive modelling space. It gets around some of the issues with interacting with Hadoop while still delivering performance. With open source projects survival of the fittest is the order of the day, far more so than in classic insurance software markets. Hadoop has it’s place, with many insurers globally investing in it.We will see new fashions in analytics approaches and more opensource tools I’m sure. Some will follow the Dodo. For those interested in Hadoop have a look at my report from 2011, when Hadoop was new and cutting edge. It seems it requires an update.
May 21, 2015 by 3 Comments
Artificial intelligence has been around nearly as long as humans have been able to think about themselves, about thought and what they do. Empathy is wired into us – some more than others but we are all capable of thinking from another’s point of view. This capacity leads us to anthropomorphize things that aren’t human, to imbue things in our daily lives with human qualities like moods, characteristics and personality. When we build puppets, robots, models that look sort of human it is easy to for us to assign it with greater power, ability and promise than is really there. For marketers in other fields, to have consumers attribute their products with ‘magical’ properties would be a dream come true but for artificial intelligence it is a nightmare – one the industry has expended funds marketing against. Artificial intelligence has delivered many great tools which today we take for granted. Our phones listen to us and understand our requests in the context of our calendar, our camera’s recognise faces and social networks tell us who those faces belong to, machines translate words from one language to another (although don’t get the translations tattooed just yet) and the list goes on. We chuckle at these mistakes these learning and adaptive systems make, we see the huge strides and investment and we expect a new human like intelligence to emerge in the short term. Around the middle of every decade since the 60’s there has been a peak in excitement for AI, a frustration with it’s lack of progress, and a reduction of funding or AI winters as they are called. In the eighties it was LISP machines, in the nineties it was expert systems. Now in the twenty-tens (I thought it was teenies but that’s a kids show apparently) we are seeing a resurgence of AI, a blending of machine learning, predictive modelling and cognitive computing along with self driving cars. This raises some rare and interesting questions:
- Are we headed for a new AI winter?
- Or an AI apocalypse?
- Also, will I still be cleaning my home in 2020?
March 19, 2014 by Leave a Comment
At each of the five Celent Innovation Roundtables held in the last several months, innovation practitioners consistently identify culture change as a significant success factor. A particular challenge, poor communication between technologists and their business partners, is often cited as a barrier. The Second Machine Age by MIT professors Erik Brynjolfsson @erikbryn and Andrew McAfee @amcafee offers some help. Their explanation of digital innovation made a big impression on me as the clearest description that I have found so far. The approach is simple: “digital information….is built on multiple layers”. It is a “recipe” of different automation solutions mixed together. That is, look at a list of digital technologies, pick a few and combine them in unique ways so that they work together, and deliver new value. This description led me to revisit some Celent insurance innovation case studies and rethink how to best explain them. The first, the AXA claims example (Visualizing the London Riots at AXA UK, http://www.celent.com/reports/visualising-london-riots-axa-uk), outlined how the insurer combined data from public police records, media reports, and their internal systems to predict which of their insureds might suffer a loss during the multi-day rioting in the U.K. in 2011. AXA “layered” successive sources of digital data, then added some analytic algorithms to produce a new and valuable tool designed to proactively identify at-risk insureds (mainly small businesses that were exposed to looting). All of these technologies existed on their own, in isolation, until they were combined to yield new insights which helped avoid losses. The second study is from Tokio Marine & Nichido Fire Insurance Co., Ltd. They were recognized as a Celent Model Insurer for their One Time Insurance product (Model Insurer 2012: Case Studies of Effective Technology Use in Insurance http://www.celent.com/reports/model-insurer-2012-case-studies-effective-technology-use-insurance). They combined geo-location, text messaging, and data prefill services to deliver real-time insurance offers to subscribers. As a prospect drives to the airport, their mobile phone receives a text from the insurer with an offer for travel insurance. Similarly, texts are sent as golfers arrive for their tee times, skiers approach the lifts, etc. It is the combination, or layering, of these technologies in a unique manner that creates the innovative service. The value of this explanation is not only academic. Layering strikes me as a useful tool to explain how all of this “digital stuff” can fit together. The recipe and layering metaphors succinctly describe digital in non-technical, accessible terms. It can be used with any audience to illustrate how the sum of the parts can be greater than the whole. I also see value in using layering to generate new ideas. My thought is that, in an interactive session, a group of participants can create a list of technologies, data sources, etc. and then brainstorm different combinations from them. Our continuing research illustrates that there is no one prescription for innovation, but there are guideposts to follow. The use of the layering metaphor to improve communication and as a technique for brainstorming is one such guide.
February 21, 2014 by Leave a Comment
Traditionally insurers have been structured by line of business and some have grouped those around personal lines and commercial lines to differentiate businesses from people. With the opportunities of varied distribution channels and more sophisticated technologies insurers are starting to be much more granular in their view of the customers. Insurers have now the chance to move from their traditional top notch markets and be able to create an offering to attract the different segments. Some of these moves include Microinsurance targeting people in the base of the pyramid and Small and Medium Business (SMB) insurance products. Microinsurance products are being launched almost every month in different parts of Latin America. Most recently it was announced that Asomi and Redcamif will be launching an initiative in El Salvador with life insurance policies written by Pan American Life Insurance Group (Palig) with premiums as low as $0,68 per month. Some brokers, large ones, are moving into the SMB market but using its affinity platforms instead of their commercial platforms to support this business. While originally SMB should have fallen into commercial, they realize that it requires processes and the agility expected also in their affinity business. In another interesting move, Metlife Mexico announced yesterday the creation of a new division that will sell to socio economic segments C and D and to young people, those that are not the usual target of insurers. According to the classifications developed by AMAI, a Mexican association, the country’s population is divided into five segments: AB (people with high purchasing power and income), C+ (people with higher-than-average incomes, whose families are headed by someone with a college degree and have at least two cars), C (people with middle incomes, whose families are headed by someone with a high school degree and have both a car and the ability to take one trip per year), D+ (people with incomes slightly below average, some secondary education and no family vehicle), D (people with low income levels and a fairly austere way of existence, who have a primary school education and who lack access to traditional banking services). Metlife Mexico will be offering simple and flexible products while also developing better distribution channels, with emphasis in the use of technology. Software vendors are coming in also to provide solutions towards being more granular. Solutions around analytics to better understand your customer, digital to better serve them and master the points of contact, core processing and BPM to adjust your products and processes accordingly, just to mention a few. Last year Guidewire presented its vision on how a core system will be able to support customer segmentation already delivering some required functionality. Core systems are just another gear in the engine and it’s important that vendors acknowledge how they need to integrate into other solutions for the insurer to be able to deliver a customer segmented value proposition. While I believe customer segmentation is where the industry needs to go, it is not without huge challenges. Insurers need to address the differences and purchase attitudes of those different segments. Omni-channel is one of the aspects, but also dealing with channel conflicts and regulation. Products need to be tailored in a way that can be flexible but capable of scaling massively, and this means looking into pricing, packaging, marketing, distribution and servicing. Processes need to be adjusted in order to provide the correct value to each segment. At the end of the day you don’t want to be perceived as under-performing and not providing the required value, but neither you want to over deliver if this means excess of cost and important cuts in your margins. My final thoughts for you. How will your structure look as you move into serving segments? How will this affect reporting and statistics by the way, which today is seen by line of business (even by regulators)? Are you ready? Are we ready?
January 1, 2013 by 1 Comment
For those interested in how new data techniques and availability are changing business models, I can recommend the article Smarter Information, Smarter Consumers in the latest edition of Harvard Business Review. http://hbr.org/2013/01/smarter-information-smarter-consumers/ar/1 The central premise is that legislation in the U.S. and U.K. now requires government agencies to make public data available and consumable in electronic form. This enables new techniques that leverage this information and provides increased value by making the purchasing process more intelligent. The authors offer their concept of “Choice Engines” – on line tools that guide consumers to make better purchasing decisions more efficiently using public information. At some point in the future, they also predict that private data will be added to the mix and allow the engines to work at a personal, individual level. Most of the use cases are consumer product-oriented, but as this blog has described previously, customer service expectations in other industries will influence insurance purchasing. The person who benefits because their cell phone company suggests ways to lower her bill (the authors’ example) will also want the same service from her insurance agent/company. Consumers and businesses will expect to be contacted by their agent/insurer when their risk profile changes. For example, if an addition is added to a house, insureds will expect that their insurance will be monitoring building permits and will want to be contacted proactively so their insurance can be adjusted appropriately. Two questions specifically related to insurance deal with timing and distribution models. Which insurance company will be the first to employ a choice engine for its insureds and prospects? Can an insurer with a mediocre data infrastructure and skill base compete with those which invest early and heavily in data techniques? Will independent agents embrace choice engines as an enabler, or reject them as a threat to their value proposition? Would an insurer be willing to offer such a tool to a distribution force that they don’t control? There is no question that managing risk will move from a point-in-time (usually renewal) event to a more continuous process. What is to be seen is which company changes the insurance purchasing model and transforms the buying process by using a tool like a choice engine.