‘Change’ Is Not a Word Insurance IT Leaders Should Fear
Robert Regis Hyle | August 20, 2015
Strategy Meets Action will hold its annual Summit in Boston on Sept. 21, and the focus for this year is: Becoming the Next-Gen Insurer. SMA founder, Deb Smallwood, agreed to answer a few questions about the Summit and important issues facing the insurance technology industry.
ITA: We use the words “transform” and “change” quite a bit, but a company’s ability to change or transform is extremely difficult given the nature of the insurance industry. What are some of the incremental steps you recommend for insurance carriers?
Smallwood: Change is hard, regardless of the industry, but it isn’t impossible. The first step toward change is to set a ground rule that change doesn’t have to be made overnight or done in a blink. Some of the most successful transformations have occurred by taking methodical, planned steps and making small innovations along the way. SMA defines innovation as coming from a desire and a commitment to constantly improve, to think differently, and to envision and enact change. At the SMA Summit, insurers will have the opportunity to envision the possibilities, relate them to real success stories, and make valuable connections with others who have embarked on the same path of change to transformation. Attendees will leave feeling energized and positive about the potential in their own organizations so that “change” doesn’t have to be a word we fear.
ITA: What other industries should insurers study to reach the level of change you call Next-Gen Insurer?
Smallwood: It is critical that insurers look outside to see the progress of innovation. The world is now so connected that it is impossible to ignore what other industries are doing. The four industries that continue to be front runners in innovation are high-tech, healthcare, retail, and automotive. In the high-tech industry, with companies like Google and Apple, innovation is in their DNA. They continue to be the front-runners and set the standard for what consumers (and the world) can expect from products and services. Next is healthcare, and from innovative products and manufacturing, the healthcare industry is always seeking a competitive edge to outdo the newest product or service and the healthcare exchanges. Next, in retail innovative channels and infrastructure are changing the way humans shop. Advances in logistics and big data also have allowed retailers to gain unprecedented insights into consumer habits, tastes, and channels for shopping. (Look at how Amazon has changed not only the way you shop, but also how you can expect to receive shipments and they continue to push the envelope with drone delivery). Finally, the automotive industry is consistently changing its identity. Automakers are partnering with the high-tech industry to create self-driving cars, such as the Google car. Volvo has said it wants to expand its relationship with the driver and for a car to be like a mobile device. Ford even says they are mobile company, not a car manufacturer.
Ultimately, pulling insights from outside insurance can inspire and inform decisions and changes being made in your own company. At the SMA Summit, we will have a panel with outside industry leaders who will share their own insights about the advances being made and link them directly to challenges facing insurers.
ITA: What are some of the new business models you feel insurers should embrace and how difficult is it to adopt these new models?
Smallwood: New models for business are happening all the time. SMA’s Innovation in Action Awards reflect these models and new ways of doing business. SMA is seeing new business models for creating new products with faster time to market and little investment in technology. They allow companies to be able to test out concepts and scale for success. We are also seeing new channels for self-service which are creating a better customer experience. For example, quoting/buying life insurance designed and focused on the customer experience using streamlined products is becoming a game changer, far above the traditional methods of doing business. At the SMA Summit, we will be highlighting these business models with the Innovation in Action Award winners and will be sharing the case studies of their successes.
ITA: One of the SMA Summit sessions deals with imagining the power of data. How close are most insurers to unleashing that power and what are the critical steps needed to achieve that level of data understanding?
Smallwood: Many insurers are gaining traction from unleashing the power of their own data by using proven external data and modeling. Insurers must first acknowledge data as an enterprise asset not an IT asset. Those who shift to an enterprise group/organization with data and report to business leadership achieve and move faster toward linking business and IT, a key tenet of being a next-gen insurer. But, in all too many cases, the gap is widening between business and IT, and we are witnessing the beginning of the explosion of new sources of machine data (Internet of Things), social media data, images, videos, and other big data. At the SMA Summit, we will have a chief data officer and business executive from operations discuss how they work together with data and with advanced analytics, and how they maximize the benefits for their operations and company. The session planned is sure to allow attendees to discover how these leaders work together and bring the power of data to the forefront, and then how to apply the lessons learned to their own companies and use the insights to leverage the power of data to transform.
ITA: Most people agree that carriers can’t achieve next-gen status without modern core systems. Will the new generation of modern systems position carriers for transformation and change?
Smallwood: A core system not only creates the platform for running the core business, it also allows for the ability to easily create new products, link to new channels, leverage new sources of data and models, and support changes in business models. Many software leaders are architecting the new generation of modern core systems to be in a position for the future. Today they are utilizing technology advances like RESTful APIs and responsive design, and offering platforms for both business process automation and data analysis beyond reporting. Technology investments in core systems are adapting to tomorrow’s world and can help make the journey of becoming a Next-Gen Insurer a smooth ride. At the SMA Summit, we will have two sessions on this topic and will talk about the evolving solutions, sharing two transformational next-gen core system modernization stories from leading insurers.
Insurers interested in attending the SMA Summit can contact Smallwood for a discounted or complimentary pass at 603-770-9090 or firstname.lastname@example.org.
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