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Modern Platforms Get It Right

By Robert Regis Hyle

New technology has taken on almost magical properties over the last decade as consumers and business users have achieved greater connectivity than anyone but Chester Gould ever imagined.

Improvements in business technology have not stopped and likely won’t for the foreseeable future, but at least one industry analyst believes the human element is one factor that inhibits insurance carriers from achieving the results carriers imagined when they began the process of upgrading their software platforms.

Mike Fitzgerald, a senior analyst in the insurance practice with Celent, believes the problem many companies face is they are taking old ways of doing business processes and putting them on new modern platforms. He predicts business leaders will begin to challenge why IT leaders are promoting familiar business processes, but with faster systems and smaller staffs.

“The second wave of core system implementation will be to look at how business is conducted,” he says. “What has happened is legacy ways of doing business have been transferred to modern platforms. People are not going to get the benefit they expect from these newer systems with that kind of dynamic.”

Insurers need newer platforms, insists Fitzgerald, but carriers have to look forward to the transformation as more than plugging in a new system and going online.

“It should be about getting the platform in place and continuing to work on the business processes,” he says. “The mindset can’t be to take 18 months to plug in a new package system and go back to a steady state. Maybe you take a breather [after the system has been installed], but you have to look at the platform you have and how do you change the tools you have.”

Business and IT leaders need to realize that the purchase and implementation of new systems has to be the start of a big push to achieve all the benefits that come from a new system. Carriers need to build capabilities, according to Fitzgerald, particularly around customer engagement with the company, how the company interacts with suppliers, and how the company pulls in data and analytics that it had not previously used.

“If you move your household, you don’t want to go through the hassle of changing all your policies,” says Fitzgerald. “Wouldn’t your insurance company know that? Isn’t is registered in a public database? Carriers need to build utilities to take some of the hassle out of insurance. Previously the agent did that kind of stuff, but commissions have gotten so small that agents don’t have any incentive to do that work so they wait until somebody calls. It’s always reactive.”

Fitzgerald believes insurers are going to need systems that are more proactive in ways not seen before.

“How do they identify opportunities in business approach and regulation?” asks Fitzgerald. “That’s around processes with really deliberate innovation. If you look back 10 to 15 years insurers were really bad with project management, but today more professionals on the business and IT side started getting certified [as project managers]. Carriers put PMOs in place and are better about project governance.”

As insurers look forward 10 years, Fitzgerald sees the question about innovation being about getting better at processes.

“It’s not magic,” he says. “It’s something they can do if they put people in charge of getting it done, funding it, and putting the right processes to achieve a better outcome.”

A lot of the challenges insurers face have to do with connectivity, data exchange, and analytics and Fitzgerald maintains the modern systems are well positioned to do that. Where the gap comes is making all that technology work. 

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