A golden day for insurance: Celent 2016 Model Insurer winners

In the historic Museum of American Finance, surrounded by golden exhibits including gold bars, a gold Monopoly game and even a gold toilet(!), the 2016 Celent Model Insurers were announced yesterday.  Part of our annual Innovation and Insight Day, we had over 150 insurance professionals in attendance (and over 300 in total), it was a great day for networking, idea sharing, learning about award winning initiatives and hearing inspiring speakers talk about the future of financial services. 

Yaron Ben-Zvi, CEO and co-founder of Haven Life, was the Model Insurer key note speaker. He discussed how Haven is using technology to reach a younger, digital-savvy customer with a life insurance experience that meets their expectations. He spoke about the journey from ideation to reality for their term insurance products which can be purchased online in only 20 minutes. He encouraged the audience to “think big but start small” and to apply the learnings along the way.

The Haven Life presentation was followed by the main event, the announcement of the 2016 Model Insurer winners. Every year, Celent recognizes the effective use of technology projects in five categories across multiple business functions.  We produced our annual Model Insurer Case Study report which clients may download here.  This year there were fifteen insurers recognized including Zurich Insurance, the Model Insurer of the Year.  Here are the winners: 

Model Insurer of the Year   

Zurich Insurance: Zurich developed Zurich Risk Panorama, an app that allows market-facing employees to navigate through Zurich’s large volumes of data, tools and capabilities in only a few clicks to offer customers a succinct overview of how to make their business more resilient. Zurich Risk Panorama provides dashboards that collate the knowledge, expertise and insights of Zurich experts via the data presented.

Data Mastery & Analytics

Asteron Life: Asteron Life created a new approach to underwriting audits called End-to-End Insights. It provides a portfolio level overview of risk management, creates the ability to identify trends, opportunities and pain points in real-time and identifies inefficiencies and inconsistencies in the underwriting process. 

Celina Insurance Group: Celina wanted to appoint agents in underdeveloped areas. To find areas with the highest potential for success, they created an analytics based agency prospecting tool. Using machine learning, multiple models were developed that scored over 4,000 zip codes to identify the best locations.

Farm Bureau Financial Services: FBFS decoupled its infrastructure by replacing point to point integration patterns with hub and spoke architecture. They utilized the ACORD Reference Architecture Data Model and developed near real time event-based messages.

Innovation and Emerging Technologies

Desjardins General Insurance Group: Ajusto, a smart phone mobile app for telematics auto insurance, was launched by Desjardins in March 2015. Driving is scored based on four criteria. The cumulative score can be converted into savings on the auto insurance premium at renewal.

John Hancock Financial Services: John Hancock developed the John Hancock Vitality solution. As part of the program, John Hancock Vitality members receive personalized health goals. The healthier their lifestyle, the more points they can accumulate to earn valuable rewards and discounts from leading retailers. Additionally, they can save as much as much as 15 percent off their annual premium.

Promutuel Assurance: Promutuel Insurance created a new change management strategy and built a global e-learning application, Campus, which uses a web-based approach that leverages self-service capabilities and gamificaton to make training easier, quicker, less costly and more convenient.

Digital and Omnichannel

Sagicor Life Inc.: Sagicor designed and developed Accelewriting® , an eApp integrated with a rules engine; which uses analytic tools and databases to provide a final underwriting decision within one to two minutes on average for simplified issue products.

Gore Mutual Insurance Company: Gore created uBiz, the first complete ecommerce commercial insurance platform in Canada by leveraging a host of technology advancements to simplify the buying experience of small business customers.

Operational Excellence

Markerstudy Group: Markerstudy implemented the M-Powered IT Transformation Program which created an eco-system of best in class monitoring and infrastructure visualization tools to accelerate cross-functional collaboration and remove key-man dependencies.

Guarantee Insurance Company: In order to focus on their core competency of underwriting and managing a large book of workers compensation business, Guarantee Insurance outsourced its entire IT infrastructure.

Pacific Specialty Insurance Company: Complying with their vision is to become a virtual carrier, meaning all critical business applications will be housed in a cloud-based infrastructure, PSIC implemented their core systems in a cloud while upgrading infrastructure to accommodate growth in bandwidth demands.

Legacy Transformation

GuideOne Insurance: GuideOne undertook a transformation project to reverse declines in its personal lines business. They launched new premier auto, standard auto, and non-standard auto products, as well as home, renter and umbrella products on a new policy administration system and a new agent portal.

Westchester, a Chubb Company: Chubb Solutions Fast Track™, a robust and flexible solution covering core business functionality, was built to support Chubb’s microbusiness unit’s core mission of establishing a “Producer First,” low-touch mindset through speed, accessibility, value, ease-of-use and relationships.

Teachers Life: Teachers Life has achieved a seamless, end-to-end online process for application, underwriting, policy issue and delivery for a variety of life products. Policyholders with a healthy lifestyle and basic financial needs can get coverage fast, in the privacy of their own homes, and pay premiums online in as little as 15 minutes.

The quality of the submissions this year is a clear indication the industry is turning a corner and embracing transformation, digital initiatives, innovation and valuing data analytics.  It is inspiring to see the positive results the insurers have achieved and a pleasure to recognize them as Model Insurers for their best practices in insurance technology.

How about your company? As you read this, are you thinking of an initiative in your company that should be recognized? We are always looking for good examples of the use of technology in insurance. Stay tuned for more information regarding 2017 Model Insurer nominations.  

 

Announcing the winners of the 5th Asia Insurance Technology Awards

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.

Three things to consider when choosing your vendor partner

Choosing a vendor can make your head spin. There are so many things to consider. I know I have been tempted to create a dartboard and throw a dart to make the final decision. After hearing multiple presentations, most with similar pitches, the result can be “vendor soup.” So how do you decide? There are three things that I consider when making a decision that have nothing to do with the system itself. It is important to keep in mind that each insurer is unique, and there is no single answer that is right for all. The goal is to find a partner who is a good match for you.
  1. Delivery Approach
Aligning on how the deliverables will be carried out is critical. Project success depends on having everyone on the same page. Some questions to consider are:
  • What is the project methodology?
  • What is the development methodology?
  • Do you want the vendor on-site during the entire project?
  • How involved do you want the vendor to be with requirements and user testing?
  • How involved do you want to be with construction and unit testing?
  • Will the delivery schedule match your in-house schedule – not too short or too long?
  • How often does the vendor provide fixes?
  • How will the vendor work with your current vendors and/or outsourcers?
  • What is the vendor’s experience providing system deliverables along with the existing business priority deliverables?
  1. Culture
Projects that appear headed for success can take a nose dive because of a mismatch between insurer’s expectations and what is possible based on the vendor’s culture. Culture cannot be changed in the short term so it is essential to ensure a good match. Questions to ask:
  • What is the experience in the domain?
  • Are you more comfortable with a mid-size or large vendor?
  • Will the project team be dedicated to your project?
  • What is the profile of the staff who will be assigned to the project team? How deep is the bench?
  • What percentage is on-shore vs off-shore?
  • Will the project require 24×7 support to meet deadlines?
  • Who will be the main contact? How many domain experts are available?
  • What is the turn-over rate for developers, project managers, business analysts and business architects and is there a good mix of each of the skill sets?
  • What is the organizational structure?
  • What is the governance structure? How are issues escalated and resolved?
  • Are the vendor’s values and behaviours a match for your company?
  1. Industry Experience
Everyone enjoys a good marketing story. However, to run a successful project, it is a necessary to understand the vendor’s actual experience. The following questions will provide a good assessment:
  • How long has the vendor been selling systems? How many similar sales has the vendor made?
  • Does the vendor have the capacity to run multipe projects simultaneously? Can the vendor provide successful references?
  • Does the vendor use system integrators?
  • Do the estimated time frames match the actual time frames for the implemented projects?
  • Do the projects expected benefits match the actual benefits?
  • Is there an active user group?
  • What is the vendor’s financial strength?
  • Will the vendor provide thought leadership and best practices from actual experiences?
  • Is there a five year roadmap? Is the roadmap innovative or does it reflect the addition of common features or functions?
There are no guarantees that the decision will be the right one. However, having a set of vendor specific questions and expectations will assist in highlighting the best choice for your company. One of the keys to program success is to choose the vendor understanding that delivery approach, culture, and industry experience are as critical as the features and functions of the system.

Pushing beyond apps

It struck me while I was driving this morning: First-gen mobile apps are fine, but virtually everyone is missing high-volume opportunities to engage with their customers. Allow me to back up a step. I was stuck in traffic. Not surprisingly, that gave me some time to ponder my driving experience. I found myself thinking: Why can’t I give my car’s navigation system deep personalizations to help it think the way I do? And how do I get around its singular focus on getting from Point A to Point B? I explored the system while at a red light. It had jammed me onto yet another “Fastest Route,” disguised as a parking lot. My tweaks to the system didn’t seem to help. I decided what I’d really like is a Creativity slider so I could tell my nav how far out there to be in determining my route. Suburban side streets, public transportation, going north to eventually head south, and even well-connected parking lots are all nominally on the table when I’m at the helm. So why can’t I tell my nav to think like me? I’d also like a more personal, periodic verbal update on my likely arrival time, which over the course of my trip this morning went from 38 minutes to almost twice that due to traffic. The time element is important, of course. But maybe my nav system should sense when I’m agitated (a combination of wearables and telematics would be a strong indicator) and do something to keep me from going off the deep end. Jokes? Soothing music? Directions to highly-rated nearby bakeries? Words of serenity? More configurability is required, obviously, or some really clever automated customization. Then an even more radical thought struck. Why couldn’t my nav help me navigate not only my trip but my morning as well? “Mr. Weber, you will be in heavy traffic for the next 20 minutes. Shall I read through your unopened emails for you while you wait?” Or, “Your calendar indicates that you have an appointment before your anticipated arrival time. Shall I email the participants to let them know you’re running late?” Or (perhaps if I’m not that agitated), “While you have a few minutes would you like to check your bank balances, or talk to someone about your auto insurance renewal which is due in 10 days?” What I’m describing here is a level of engagement between me and my mobile devices which is difficult to foster, for both technical and psychological reasons. And it doesn’t work if a nav system is simply a nav system that doesn’t have contextual information about the user. But imagine the benefits if the navigation company, a financial institution, and other consumer-focused firms thought through the consumer experience more holistically. By sensibly injecting themselves into consumers’ daily routines—even when those routines are stressful—companies will have a powerful connection to their customers that will be almost impossible to dislodge. Firms like Google have started down this path, but financial institutions need to push their way into the conversation as well.

Next step in the Internet of Things for life insurance

The last seven days have been exciting for the next wave in Life insurance (and Health). Last week we saw John Hancock introduce the Vitality program into the US. This week we have a collaboration between IBM, Apple and Medtronic, the huge maker of medical devices. Just yesterday we had an inquiry from a major Life insurance company asking about a service that consolidates data from multiple users of wearables. We were not aware of a major player offering the service, but that same afternoon, this partnership was announced. As the use of wearables increases, particularly for use beyond an individual’s fitness, it will be critical for standards and services to emerge to bring this data to multiple users. Including Life insurance companies. Of course, we still have the obvious challenge of competition in the industry. This is great for users of Apple and Medtronic’s products, but what about people wearing a Moto 360 or Fitbit? We are not quite there yet, but everything happens with a first step. I commented the other day to a colleague that this is the most excitement we have had in Life insurance since the introduction of Universal Life in the 1980s. The pace will only increase.

John Hancock introduces Vitality in the US – will it transform the industry?

Bold words, perhaps. Transform the industry? It just might. If you did not see the announcement, you can learn more about the program at the John Hancock Vitality website. If you participate in their program, you can receive rewards and premium savings. The program rewards healthy activity, regular exercise, regular checkups and even reading about topics John Hancock offers. It is a program that will feel familiar, as it works similarly to other retail rewards programs, but is focused on your life style. That’s one of the benefits – it is simple and easy to use. The rewards partners are quite extensive as well. In other words, a win-win. The insured lives a healthier lifestyle and is rewarded for it. The insurer benefits as their customers live longer, which is to their financial benefit. I love a good win-win. The program is not actually new. It’s been in existence, in earlier forms, for a number of years. It began in South Africa, with Discovery Vitality, then moved to the UK and to Asia. What makes it even more interesting now, is the intersection of an innovative program with technology. We have all seen technology in the fitness space. You cannot walk around a mall without seeing a Fitbit. For those that think this is a phenomenon only focuses on youth, look when you go shopping. Wearable tech is on the wrist of every age group. Celent certainly expects that to grow quickly, given the upcoming release date for the Apple Watch in the US. Today is even the day you can see one in your local Apple store. The Vitality program integrates this information directly into the rewards, giving you credit for the exercise, just by virtue of reporting it. There are some questions, and I was asked some of those on CNBC’s Nightly Business Review program on Wednesday night. You can view the interview here. Some are fairly obvious – such as security. We don’t see that as an issue here, as the information shared is very limited and not information of interest to a hacker. How much I walk and my heart rate is just not valuable information to anyone. Let’s also not forget that programs with similar components are in place today in the health insurance world. Many companies offer discounts to their employee’s insurance if they complete some basic steps. Our parent company does and my family saved a significant amount of money by participating. One better known program is Humana’s Vitality program – yes, there is Vitality again. Another could be concern that this would limit Life insurance, or even subject you to cancellation, if you didn’t meet your fitness goals. Again, that’s not really an issue. The contractual obligations of an insurance company are very clear and neither this program, not the contract, allows that to occur. The program is also entirely optional. In fact, what industry should we trust more than the Life insurance industry? The basic premise of life insurance is spreading risk. We pay our premiums, for years or even decades, and expect our loved ones to be taken care of in their times of greatest grief. And they are, and have been for centuries. It is one of the reasons I like being in this industry – we help those that have just been stunned by loss. Readers of earlier blog posts know that I enjoy technology and own and wear a very high-tech watch. I am all set for this program and many of you are too. One of my reports from last year explored this very topic, and referenced Vitality as an example. I’m pleased to see movement on the topic, particularly by a company as strong as John Hancock. I encourage those that are interested to follow some of these links, and check out my interview, to learn more about the program. I am sure we will have more soon.

Seeing claims and risks in 3D : Might HoloLens succeed where Google Glass didn’t?

There have been radical changes in user interface and computing technology over the last decade or two. The Nintendo Wii propelled a new style of gaming to the forefront and touch enabled smart devices have done wonders for Apple, Samsung and Google’s Android platform. All of this seems to have made Microsoft’s old WIMP based Windows platform less relevant, despite moves to touch enabled interfaces and Windows mobile in recent years. Perhaps now though Microsoft has found the key to the next generation interface with HoloLens. With a tip to Google Glass this is a wearable headset based system more focused on enabling the holograph interface to interact using augmented reality to undertake various tasks. Perhaps Microsoft have found the killer App Google Glass was missing? Or perhaps the high end 3D gaming style interfaces are better at capturing our imagination than the simpler, untilitarian mobile interfaces we find on todays phones…. What might this mean for the Insurance industry? The interfaces and augmentations imagined for loss adjusters and those in the field apply equally to this new technology, albeit the headset is much more intrusive. Leveraging this technology to engage with people on the ground and share a common visualisation, to direct loss engineers to the right items and help provide data about clients in catastrophe affected areas in a rich and useful manner are all possible. Augmented reality and chunky headsets aren’t new, but the experiences previewed by HoloLens have sparked the imagination of those who have seen and played with it. With the response to HoloLens being very positive so far I wonder if we will see a relaunch of Google Glass or it’s successor sooner than one might have expected. For those who are interested the technology appears to have it’s origins in big data, as this article from April last year talks about leveraging the Holograph interface for visualising large datasets.

Choosing a New Claims System?

Few carriers are doing nothing when it comes to claims. Year after year, we continue to see significant activity as carriers replace or enhance their claims solutions. The reasons for such activity are plentiful. Claims systems are aging which means that they are expensive to maintain. Older systems generally are much less flexible than modern systems with robust configuration environments. Business rules are regularly embedded in code, which reduces a carrier’s agility in making changes rapidly. They often are decoupled from policy or customer systems so accessing and aggregating data across these systems can be difficult. They were initially designed to focus on managing the financial aspects of claims not the customer service aspects of claims. It’s also getting harder to find resources that can or want to work on older technology. Meanwhile, carriers replacing core claims admin systems are trying to achieve multiple goals. Insurers’ corporate objectives fall into three broad categories:
  • Getting bigger by growing the top line. A policyholder who feels that a claim was handled quickly and fairly is a policyholder who is much more likely to renew.
  • Getting leaner through higher productivity and expense control. When specific tasks (such as accessing external data or generating forms and correspondence) are automated, an adjuster’s time is focused on the remaining tasks and decisions.
  • Getting smarter by adjusting claims more accurately. Through workflow and rules, a new core claims system gives claims adjusters much improved tools to make the right decisions and take the right actions.
Selecting and implementing a new core claim system can contribute to the achievement of all three corporate objectives. Donald Light and I have just published a report that profiles the available claims solutions in North America. The report provides an overview of the different basic, advanced and technical features a carrier can evaluate. It also provides detailed profiles of the different vendors. Some of the vendors qualified for a more in depth profile that includes customer reference checks and our opinion of the solution. If you’re thinking about beginning a claims replacement, check out the report here. It’s a great place to start your research process. Then give us a call. We will be happy to chat in more detail about any of the solutions and help you as you move through your selection process.  

For Halloween: The Tricks to Get Innovation Treats

Innovation is not witchcraft but, when done successfully, there is a touch of magic. The magic happens when innovation becomes “part of the way we do things around here” (read: corporate culture). When people across the firm approach their jobs constantly through the lens of “how do I change my job so that I deliver more value to my customers?”, magic can happen. We discussed this in a webinar this week (Innovation in Insurance: Differences across Continents). The point was made that there are specific actions (tricks!) that prepare a corporate environment for magic. Specifically:
  • Establish a common language around innovation; what is it? what is it not?
  • Revise reward systems, especially around encouraging “fail fast” behaviors
  • Develop a communication plan around innovation – leverage Corporate Communication expertise to sustain a messaging effort around innovation
  • Tune existing governance structures to handle innovation initiatives differently than run-the-business projects
The message coming through in Celent research is that innovation is more process, sweat, and political capital than black art. So, try these tricks in your organization so that you (and your customers and teammates) can enjoy some innovation treats!

Keys to Successful Policy Administration System Upgrades

All IT professionals have a horror story about a system upgrade gone wrong. Since most policy administration systems (PAS) have a 12 – 18 month upgrade cycle for major releases, there are plenty of opportunities to misstep. To address this dynamic, a consistent claim of modern PAS vendors is that multi-tiered architectures and other technical designs ease the pain of upgrades as compared with legacy environments.   However, up to now, objective data concerning upgrade metrics was difficult to collect. How long does it really take to upgrade a PAS? Do modern systems live up to the levels of ease that vendors cite? Historically, have insurers experienced any difference in outcomes when using vendor or third party system integrator staff versus internal staff to execute the upgrade?   In order to close this gap, Mike Fitzgerald and I surveyed 44 North American insurance carriers to provide answers to these questions as well as to understand major challenges faced and overcome. The report reviews carrier’s experiences in policy administration upgrades. It examines reasons for doing upgrades, staffing strategies, scope, time and budgets inherent in upgrades and provides advice from carriers on challenges to prepare for and advice to assure a smooth successful process.   Here are some of the key findings from the report.
  • Most carriers doing upgrades do a point upgrade and generally, these are successful.
  • All upgrades to modern systems in the survey group were successful, supporting the expectation that these platforms reduce the pain related to ongoing updates.
  • The most frequently reported reason for taking an upgrade is “to gain new functionality” and the second most common driver is “current version no longer supported”.
  • Only 10.7% of insurer respondents used their own employees without assistance from vendors or third party companies. The most common uses of vendor services for upgrades are for coding, configuration and testing.
  • Most upgrade projects (64.3%) meet their delivery deadline.
  • Some carriers actually came in below budget on their upgrade, but the vast majority, 60.7%, came in on budget.
Many carriers report that they have not upgraded their PAS either because they are homegrown, or, more frequently, because these are new installations. This places a particular importance on the lessons that can be learned from other carriers’ experiences as the new installations prepare for their first upgrades.   For many carriers upgrades are a big deal. They take months of effort, tie up a lot of staff, and can frustrate business partners. However, done well, they go smoothly and can add new functionality, upgraded configuration tools and deliver significant benefits.