Electronic Chat: Bryan Fowler
Robert Regis Hyle | January 16, 2017
Bryan Fowler has worked with one of the largest insurers in the world (Progressive) and one of the smallest (Oregon Mutual). His views on how the smaller carriers can adapt to changes in the market without the benefit of huge technology budgets will be one of the featured sessions at ITA LIVE 2017, to be held March 12-14 at the Fort Lauderdale Marriott Pompano Beach Resort & Spa.
Recently, the ITA exchanged some questions and answers with Fowler on his views of the insurance world today and what attendees at ITA LIVE can obtain from his session.
ITA: You’ve worked with large and small carriers, since there are more small carriers around, what do you see as their biggest technology challenge? Also, what is their biggest advantage?
FOWLER: There are a few challenges that smaller carriers have faced, traditionally. First, they tend to lag more in their movement from legacy/incumbent technologies. In part, this is because the costs of new COTS technologies has been steep, relative to small carriers’ technology budgets. A small-to-mid-sized carrier maintains a modest IT budget, yet the costs of modernization can, by themselves, be many times the entire IT budget. This is often tough to sell to a board, especially when the carrier may have been running very lean through in-house developed technologies for many years.
Second, when the sale and direction have been made/set to evolve a carrier’s technologies, the skillsets needed for this kind of effort are quite varied and most small carriers simply don’t have the skills or experience needed. Enterprise architecture, planning, program and change management are not common in small carriers.
Third, small carriers have to do most everything that the big carriers do, but with one to two percent of the budget and staff. Insurance is insurance, no matter the size of carrier. When I was at Progressive, there were nearly 3,000 people in IT and a budget in the high hundreds of millions, which supported three main lines of business (personal auto, commercial auto, special lines) plus claims and standard operational needs (workflow, doc management, CRM, etc.). At Oregon Mutual, I had to support eight or more lines, plus claims and the same operational needs, with just a tiny fraction of that budget.
Lastly, is the challenge of attracting and retaining strong technology talent. Partly because of the location of many of the smaller carriers, which tend to be more rural, partly because of legacy technologies, and partly because of the sex appeal of insurance (the industry is trying to market this better, but hasn’t reached as far as needed yet), it can be very difficult to find and attract strong talent that will take a company into the future.
Certainly, one of the biggest technology advantages of smaller carriers tends to be the simplicity of their technology ecosystem vis-a-vis the larger carriers. There’s still a lot to running an insurance company, and it can seem complex when you’re in that environment, but smaller carriers have often found ways to simplify the architecture more than they even realize. Large carriers will have hundreds, even thousands of systems trying to interrelate, where small carriers can have, in some cases, fewer than 20. When positioned correctly, this can translate into easier and faster changes for business, and also better and easier access to business data for intelligence.
ITA: How best can smaller carriers make patience pay off for themselves?
FOWLER: Patience may be a virtue, but in our business, the world is moving very quickly. It isn’t just the rise and glamour and energy of insurtech, but carriers both small and large are making changes to their products and customer/agent interactions and internal operations all the time.
Very few are sitting still, so it’s a constant push to do more, faster. In my view, the patience then has to be in the form of using organizational will power to stay focused on wisdom, leadership, strategy, and clear / uninterrupted execution seasoned with agility. This seems obvious, but executives must:
- Step back and take smart stock of the marketplace they compete in;
- Determine with clarity and honesty their organizations’ strengths and weaknesses…and decide if they want/need to adjust;
- Decide and determine where and how they can best compete. This includes identifying the marketplace variables that should trigger a reassessment;
- Set and focus on the priorities and tactics to meet those strategies, sequencing the tactics with largest returns early, and planning them in ways that they can be executed quickly.
Importantly, they must have the discipline and patience to keep the focus, barring any reassessment from above.
In terms of technologies, prioritize the changes that enable the high-value business strategies first, and find ways to execute on these quickly. For some, this means focusing on agent ease-of-use; for others, it may be data, BI/analytics; for yet others, it may be speed-to-market on product changes.
The challenge for CIOs is to influence the organization for this focus and patience, whether it be business or IT based projects. Too many organizations try to do it all, which fragments both business and IT resources so much that everything takes longer and is done with lower quality.
ITA: Are there any ways that smaller carriers can still compete without having a modern platform in place?
FOWLER: I believe so for the short-term, depending on some of an organizations’ answers/responses to the strategy and organizational self-assessment steps above. But I don’t think it can last. I know of some organizations that wrote their own agent portals a while ago, and continue to maintain them in legacy technologies even today. These are platforms that are working great for their agent strategies and the teams involved are able to make quick and meaningful changes.
However, organizations must get good at futurizing, in terms of both their technologies and their processes. In the example above, it’s well known that agent expectations are evolving. As with the rest of the insurance landscape, the pace of this evolution is quickening. Soon, our IT organizations will be asked to do things that, right now, we can’t even predict. How do we set our technology strategies and decisions for this, when a technology that is implemented tends to last years, decades?
Too much will be changing too fast in the business settings. We must find platforms and architectural designs that can anticipate the future as a world of change, which will become the norm. This is very uncomfortable for IT professionals that prefer stability and predictability, but I contend it can be both: stable/predictable and futurized, always ready for change.
ITA: What do you want the audience at ITA LIVE to come away with after your presentation?
FOWLER: First, that carriers—and suppliers, for that matter—must now be constantly aware of the expectations of their stakeholders. It’s not up to us anymore. Those who feel they decide the pace at which things will change (introduction of new products, features, stakeholder ease-of-use, and the like) will be quickly shown, in painful ways, that now and going forward, the pace of change is determined outside-in, not inside-out. The pace of consumer/stakeholder expectations will drive organizations’ priorities and needs to deliver. Examples from other industries and analogies to ours will drive these points.
Second, that the hype around innovation is real, but that not everyone has to be an innovator to survive. Being able to survive and stay relevant in a landscape where things keep changing is a matter of understanding the pace of change, what drives it, and being able to respond; not necessarily to be able to out-innovate.
Finally, to be able to identify the organizational, cultural, technological, and process strengths and weaknesses in terms of readiness for change. Armed with this information, they can determine where they want to focus their efforts. The presentation and discussion will also offer some strategies they can use to advance their readiness toward futurizing their companies and functions.
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The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
ITA LIVE 2019
The tide is up! It's time to register for ITA LIVE 2019, our annual educational and networking conference! Our theme is "The InsurTech Revolution: Cutting Through the Hype." and we'll be bringing in a torrent of industry thought leaders, amazing insight and wonderful perspectives on the world of insurtech and its impact on the insurance landscape.
ITA LIVE 2019 will present real-life examples of true startup technologies that are helping insurers gain real advantage -- and a competitive edge -- in the marketplace. We’ll highlight the more successful InsurTech partnerships, while offering case studies that demonstrate exciting innovation and cutting-edge techniques impacting all aspects of the insurance ecosystem.
Ride the wave to LIVE 2019. Sign up today! We look forward to seeing you in May, 2019!
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