A long time ago in a galaxy far far away, I went to a two hour meeting to reinvent insurance

A long time ago in a galaxy far far away, I went to a two hour meeting to reinvent insurance
It was in the Galaxy InternetBubble, stardate 2000.12.1. I was at a technology firm that was riding the Internet rocket up—and a couple of years later rode it back down. (It actually made a soft landing, and those early Web-anauts lived to tell the tale). In those heady early days of the web, there was a general feeling that the Internet was going to “change everything.” True, there wasn’t a lot of clarity about what “everything” or “change” were, but it was something many people said (and possibly believed). In any event, there was a steady stream of VC-funded insurance start-ups that would visit us, asking for our vision of what the web would wrought—while we were trying to think of some ways to be hired by those start-ups to make those visions real. If any of this sounds familiar to anyone, let me know. So there I was, minding my insurance Subject Matter Expert business, and someone asked me to attend a meeting that afternoon. The purpose of the meeting was to reinvent insurance. And I thought, “Why not?” I entered the conference room, and saw that the other attendees (bright and articulate professionals each and every one of them) had very limited insurance experience. No one in the room (with the exception of your humble blogger) could have defined hazard, exposure, or probable maximum loss, or the law of large numbers, and so on. At the end of the two hours, we had in fact not reinvented insurance. There was no follow-up meeting. Why bring up this bit of ancient history? Because we have arguably entered another period in which claims are made that technology, or digital, or insurtech is going to, if not change everything, at least disrupt everything. As an example, see these Celent reports about the end of auto insurance, or the Internet of Things, or digital strategies. If you want to separate the disruptive wheat from the buzz-based chaff this time around, here are some basic questions to ask:
  • Does the proposed use of a new technology impact the basics of the insurance model?
  • Can it scale?
  • Will it change the relationships among cost, price, and value in a way that is fair to the insurer, the distribution channel and the policyholder?
If the answers to these questions are all yes, maybe maybe someone will reinvent insurance this time around. This time around, may the In-Force be with us.

A Value Roadmap: Don’t implement a new core system without it

A Value Roadmap: Don’t implement a new core system without it
I’m sometimes asked, “What is the worst error an insurer undergoing replacement of its core solutions can make? And how can that pratfall be avoided?” There are a lot of candidates for this honor: for example poor governance, inadequate project management, underestimating the complexity of data conversion and or integration, incomplete knowledge transfer—the list goes on and on. My nominee is: Failure to define and follow a Value Roadmap as part of the implementation and near term post implementation process. Conceptually, a Value Roadmap identifies the specific types and sources of value which the new system will provide. If the insurer has already developed a good business case for the new core system, the Value Roadmap will address many of the cost reduction and revenue enhancement elements of that business case. In addition, the Value Roadmap will place these benefits on a timeline which could start (to a limited degree) during implementation, and definitely starts when the new system goes live. If the insurer does not have a reasonably complete business case for the new system (and yes that does happen); the Value Roadmap allows senior management (C-Suite and/or the Technology Governance structure) to: **  Document for future ROI and performance analyses the business and competitive rationale for the project **  Provide guidance for the remaining implementation period **  Focus on realizing value through new offerings, processes, and organizational structures Note: an earlier version of this blog appeared on the Insurance Technology Association website.

The Web 2.0 Attitude

The Web 2.0 Attitude

More than technology, Web 2.0 is an attitude. A short Q&A session helps us understand what Web 2.0 means:


“Everywhere”: Getting access to social networks or being able to communicate from anywhere in the world have become an important aspect of today’s communication. The Web 2.0 attitude requires low restriction in terms of communication capabilities. In terms of technology, portable electronic goods such as mobile phones, portable media players and extra-light laptops are the tools of mobility.


“Immediately”: Impatience is one of the key elements of the Web 2.0 attitude. People need information more quickly but they also want to share it more rapidly. In terms of technology, systems allowing instant communication like chats, Instant Messaging (IM), Really Simply Syndication (RSS) and to a certain extend SMS and Voice over IP (VoIP) are the drivers of spontaneousness.


“Everything (or whatever)”: People have an increasing need to share all kinds of information with others. This propension for openess sometimes includes also very private information. In terms of technology, the need for more transparency is supported by the increasing number of social networks and communities as well as blogs on the internet.

To whom?

“Everybody (or I don’t care)”: There is a social focus in the Web 2.0. attitude. People like sharing information and opinion but they require collaborative actions in order to feel part of a community. In terms of technology, platform allowing free change of information content such as Wikis and blogs or other types of collaborative online sites emphasize collaboration.


“The easyiest way”: Web 2.0 has a specific focus on usability and any kind of technologies enabling or easing interactivity improve usability. In this context, AJAX, Flash, Flex, Tagging or Mashup represent key enablers for improved usability.

The Web 2.0 attitude is a real challenge not only in business but in our day-to-day personal life. Insurers have already launched interesting initiatives in that domain but it seems that some of them fail to capture their real strategic impacts. I am currently reviewing a few Web 2.0 projects implemented by European insurers and I am planning to describe them in a report to be published by Celent in Q2 this year. Web 2.0 interests European insurers but some of them have failed to make their initiatives pay-back. Reviewing successes and failures will certainly help insurers better understand where is the real value of Web 2.0.

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.