Next Generation Insurance: Leading from the front.

As everybody starts to wind down the year and close their 2009 budgets and look forward to 2010, one thought that comes to mind is the purchases made that have been unused so far. For financial services firms that track investment earnings closely, it is quite interesting to note that a few millions in IT investments may not be tracking any returns yet. The most obvious example is that of software purchases that are simply not yet implemented or even poorly implemented with minimal changes to existing business or IT processes.

 

One of the key reasons for not being able to leverage software investments is a lack of ability to monitor expected benefits from IT projects. While it is common knowledge that value can be generated mainly by improving business processes (besides reducing IT costs), monitoring returns from IT projects should apply the same concept to rigorously assess target and actual changes in business metrics. Every project or IT investment should be tagged with a focused set of metrics that need to be accomplished to drive realization of returns from that investment- once such a mechanism is in place, IT execs will have an easier time managing their projects with clear visibility of benefits from beginning to end of the solution lifecycle.

 

 

Of course, one cannot ignore the people implications of the ownership role entrusted with realizing the target metrics, but that is a much larger topic best left for a future discussion!

 

Posted by George Ignatius at 07:14 PM | Permalink | Comments (0) | TrackBacks (0)

For an insurance company both Policyholders and Agents/Producers are equally important to top-line and bottom-line growth.  Even in this day and age, Producers continue to play a vital role in bringing together carriers and end customers.  Insurers are well aware of the importance of satisfied Producers — captives independents and others — in driving new revenue as well as in providing a competitive edge in the marketplace.   

It is true that market-relevant products and attractive compensation will favorably influence a Producer’s decision to contract with a carrier.  However the ‘ease of doing business’ - be it for initial contracting and appointment, tracking continuing education credits or license expiry or other administrative activities like maintaining biographical information, banking details etc. - will be a deciding factor in continuing a mutually beneficial relationship with the carrier.

Given this, I find it surprising that carriers have perhaps not accorded the same level of attention on improving Producer experience as they have in implementing business process and technology–related improvements to cater to the demands of their policyholders.

In my mind the following are three key areas carriers can focus on to enrich their Producers’ experience in interacting with them

• Enhanced Producer Lifecycle Process – Streamlined, measurable process from Producer licensing/appointment to maintenance and finally termination
• Improved use of technology, with specific reference to
      o Use of electronic/online forms – Less dependence on paper to collect Producer    information .With appropriate edits in place, online forms can also ensure that all relevant information is provided upfront and no time is wasted in following up trailing documents or incomplete information
     o Use of electronic signatures – Producer licensing, contracting and appointment process by its very nature requires agreements and approvals from both the Producer and the insurance carrier at different stages of the process.  Hence the ability to electronically review and ‘sign’ documents online will not only reduce process cycle time but will also obviate the need – and hence the cost - to print and mail/fax documents
• Selective Self-service capabilities – Empowering Producers through a security-enabled self-service application will not only provide Producers with a sense of ‘control’ but will also leave the carrier to engage in higher value support activities for the Producer.  Self-service capabilities will be especially helpful for Agencies to manage administrative needs of its own Producers, intra agency transfers, open agency management etc.

Posted by Sanjaya Kumar at 06:56 AM | Permalink | Comments (1) | TrackBacks (0)

I have been curious to ascertain the discretionary spend of insurers and I can see a shift in the response over the last few years. A few years ago, most companies would respond that, their discretionary spend is in the range of 20% to 25%. This is attributed mostly to the maintenance / support of the legacy insurance systems. Of late I am seeing an increasing trend of companies saying that they have improved this to 30% to 35%.  Most of the reduction in non-discretionary spend has come down either due to offshoring or through server consolidation & virtualization etc. However, very few companies can claim that they reduced due to better modernization of systems, processes & applications

The key questions to ask are – Does your CIO have a goal for reducing the % of non-discretionary spend? Is there an improvement on this goal year-on-year?  How are you improving this? Is it through pure cost / labor/ resource arbitrage or through “engineering” methods?

I would think that reduction in the cost through labor / resource arbitrage is easy and many organizations have achieved. Organizations that are focusing on improving this through engineering methods will tend to achieve competitive advantage due to operational efficiency as well as market differentiation. When I say engineering methods, I mean improvement in process, technology, system and application capability. These methods will have a significant impact on the business. Business leaders would be willing to spend money on these initiatives.

Where does your organization stand today on this aspect?

Posted by Siva Nandiwada at 11:25 AM | Permalink | Comments (0) | TrackBacks (0)