Next Generation Insurance: Leading from the front.

A lot has been written and discussed about social media potentially transforming the way Insurance carriers conduct their business with the consumer of tomorrow. And why shouldn't it be? After all, Facebook, LinkedIn, Twitter memberships have crossed 800 million, use of social networking among all age groups is growing exponentially and there's no indication that this juggernaut will stop anytime soon. No doubt the Gen X and Gen Y consumers of tomorrow have social media engrained as an integral part of their daily lives. And social media, if leveraged the right way, does complement and benefit the entire value chain of marketing, sales, servicing and even product design and innovation for all carriers.

However, with all the buzz around social media being a disruptive force and a game changer, widespread adoption has been rather anemic among all Insurance carriers, more so among Life carriers than P&C carriers. Surveys indicate that while all large and medium carriers are spending more and dabbling in the social media world and that their marketing and sales budgets have experimentation with social media at the top of their agenda, still they have kept their budgets and plans unchanged for traditional channels of marketing, distribution and servicing. And are cautiously optimistic about social media providing them business benefits large enough to reduce spending in traditional channels.What could be the drivers and reasons behind this? Is social media too new and unproven in the Insurance world?

One reason for limited adoption can be attributed to Insurance carrier's low risk appetite and traditionally conservative approach to new business practices and technologies.Or is the worry more around reliability and credibility of information and how and what to use it for? Are carriers concerned about the compliance and regulatory aspects of using information found in the social media world? OR Is the traditionally value conscious Insurance industry really not convinced about the ROI they can achieve with social media?

My subsequent blogs will attempt to explore the opportunities and challenges related to widespread adoption of social media among Insurance carriers around:

• Usage, Reliability and Credibility of information found in the social world

• Compliance, Regulations and Privacy aspects of social media tools

• Measuring value and ROI from investment in social media tools

What do you think? I would love to hear your views and perspective. 

Continue reading "Social Media for Life Carriers - a fad or a disruptive force" »

Posted by Sourabh Chatterjee at 2:18 AM | Permalink | Comments (1) | TrackBacks (0)

Continue reading "Smarter Organization - Simplify" »

Posted by Siva Nandiwada at 10:20 AM | Permalink | Comments (0) | TrackBacks (0)

The percentage of 17-year-olds with a driver's license dropped from 75% in 1978 to under 50% in 2008. Even if you go up two years, the drop is still significant, from more than 90% of 19-year-olds in 1978 being licensed drivers to only 77% of them 30 years later.

The reason for this shrinking of the pie seems to be a) movement towards urban areas with abundant public transportation and b) evolution of digital commerce.

With the rapid evolution of technologies, the second aspect above could only accelerate the change in consumer needs vis-a-vis protection. Auto manufacturers are already doing everything possible to get the demographic into a vehicle - ranging from making the vehicle equate to a "computer-on-wheels" to introducing "community cars" for the infrequent drivers.

The underlying question though is - will this trend influcen a change in the personal insurance products? Can the consumer demand an auto-insurance product that he/she pays for on a need-basis? Can the consumer demand a true "personal protection" product that will insure the individual regardless of the risk?

I guess the answer to all the questions above is Yes. It will be imperative for carriers to understand, engage, sell-to and service the new demographic in ways that they have never done before. How they will react and who emerges as a leader remains to be seen. There is no doubt, however, that it is time to get a lot more personal with the consumer base.

What do you think?

Posted by Sanjay Mohan at 2:57 AM | Permalink | Comments (3) | TrackBacks (0)

Continue reading "Smarter Organizations" »

Posted by Siva Nandiwada at 1:59 PM | Permalink | Comments (0) | TrackBacks (0)

The role of “business analyst” is getting more and more important as product/package companies are passing more control from IT to the hands of business users. Things like maintaining business rules, changing workflows or adding new fields on a screen - things that involved IT just few years back are now comfortably being done by business analysts. The toolset based products which can be changed via “configuration” through UI, rather than “customization” through code is helping the paradigm shift. The catch is very often it requires some IT skills like knowledge of XML or learning a scripting language which an ordinary business user (like an underwriter) may not be able to do. To make this happen a new set of “trained” business analysts are evolving who have good understanding of both business and IT. Let’s call them “Business Analyst 2.0”.

Continue reading "Business Analyst 2.0 and BAO - Business Analyst Office" »

Posted by Souvik Roychoudhury at 5:41 AM | Permalink | Comments (3) | TrackBacks (0)

I recently came across an article on the demographic shifts in the US market where

1.The multigenerational household is gaining prominence - affecting major purchases, like automobiles, homes and college tuition. With a record 70 million grandparents in America in 2010, these grandparents will be deeply involved with their grandchildren - with decisions often being made by two generations of people - the parents and the grandparents.

2.No household type will neatly describe even one-third of households. The iconic American family (married couple with children) will account for a mere 22% of households. The most prevalent type of U.S. household will be married couple with no kids, followed closely by single-person households

3.Diversity will vary greatly by age - the younger population substantially more diverse than the old . By 2015, 80% of people age 65-plus will be white non-Hispanics and just 54% of children under age 18 will be white non-Hispanics. White non-Hispanics will account for fewer than half of births by 2015

Continue reading "Demographics shifts in US" »

Posted by Siva Nandiwada at 6:56 AM | Permalink | Comments (0) | TrackBacks (0)

I recently came across an article on the demographic shifts in the US market where:

1.The multigenerational household is gaining prominence - affecting major purchases, like automobiles, homes and college tuition. With a record 70 million grandparents in America in 2010, these grandparents will be deeply involved with their grandchildren - with decisions often being made by two generations of people - the parents and the grandparents.

2.No household type will neatly describe even one-third of households. The iconic American family (married couple with children) will account for a mere 22% of households. The most prevalent type of U.S. household will be married couple with no kids, followed closely by single-person households

3.Diversity will vary greatly by age - the younger population substantially more diverse than the old . By 2015, 80% of people age 65-plus will be white non-Hispanics and just 54% of children under age 18 will be white non-Hispanics. White non-Hispanics will account for fewer than half of births by 2015

Continue reading "Demographic shifts in the US market and its implications on the consumer buying behaviour" »

Posted by Sanjay Mohan at 6:56 AM | Permalink | Comments (0) | TrackBacks (0)

Continue reading "New York Insurance Exchange" »

Posted by Sivakumar Seshadri at 10:29 AM | Permalink | Comments (0) | TrackBacks (0)

Off late so much is being said in the media about SaaS, Cloud computing and its applicability to Insurance world, Recently a leading insurance industry focused technology journal highlighted 4 key technology solutions that will peak in 2010 and identified the top technology solution every CIO is evaluating at this point of time as Cloud computing and SaaS based software models. Quite a few big names have come to public about their intentions to seriously consider SaaS and Cloud as a part of their vision though they have also raised concerns on the ability of Cloud /SaaS to protect their data privacy requirements & organizational requirements in the longer term. 

Continue reading "Insurance SaaS Services on Cloud" »

Posted by Sivakumar Seshadri at 6:45 AM | Permalink | Comments (2) | TrackBacks (0)

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.

Continue reading "Pack away the holiday stuff- wait a minute, what is that on the shelf?" »

Posted by George Ignatius at 7:14 PM | Permalink | Comments (0) | TrackBacks (0)

Over the past few months I’ve had an increasing number of discussions with insurance industry clients and prospective clients, alliance partners and analysts regarding “managing complexity . . . increasing complexity”.  These discussions frequently turn to a newer dimension of this “complexity challenge”; one that has been enabled via the availability of insurance-specific software products (n.b., whether full applications or components) that do provide a significant degree of “flexibility and adaptability”.   A variety of such products have been architected and developed with a view to enabling a significant degree of “flexibility and adaptability”.

Continue reading "“Be Careful What You Wish For . . . “" »

Posted by Brian Kearns at 4:07 AM | Permalink | Comments (0) | TrackBacks (0)

Organizations are seeing Web 2.0 as a technology enabler to achieve business objectives to deliver results. Key to success is “collaboration” between business & IT in leveraging web 2.0 to achieve business objectives.

Some key business objectives of Insurance companies are around enhancing customer experience, revenue growth, minimizing operational expenses, improving employee productivity and distribution effectiveness.  IT departments need to evaluate where Web 2.0 would be most effective to solve parts of the business problems once the business objectives are internalized.  These business problems can be broadly structured around 3 key stakeholders – Employees (for Internal Operational effectiveness & Employee productivity); Customers (Customer experience, product development & revenue growth); Partners - Distributors, Suppliers etc (For Channel productivity and efficiencies).

Once the key stakeholders / business objectives are identified, organizations could start working on three key dimensions of change management – Process, Technology & people. Focusing on technology without focusing on business process and people can be disastrous. There are several examples where blogs, wikis, discussion forums don’t attract enough interest in the user community because the key business problems or issues are not addressed

Continue reading "Tying Web 2.0 technology to Business Objectives for improving ROI" »

Posted by Siva Nandiwada at 6:16 AM | Permalink | Comments (0) | TrackBacks (0)

Read an interesting blog post by Nicolas Michellod (http://insuranceblog.celent.com) on “Some Considerations around innovation”. Nicolas suggests that Insurers need to innovate both on products as well as processes and IT is not necessarily a “must-have” but merely an enabler to achieving innovation.

I couldn’t agree more on the role of IT, as suggested by Nicolas. It necessarily needs to be looked upon as an enabler and not a must have. The tendency to leapfrog into technology solutions has historically led to the snowballing effect of complex architectures, increasing cost of ownership and further impacting the agility of the business to respond to emerging business scenarios including regulatory changes.

Continue reading "Product vs. Process Innovation" »

Posted by Sanjay Mohan at 12:00 PM | Permalink | Comments (1) | TrackBacks (0)

In my view, top three reasons why modernization initiatives in Insurance organizations do not go well
1 What you want is what you get-  More often than not, future needs are not articulated well enough from a business  vision, strategy and relevant capabilities needed
2.Misalignment of stakeholder objectives -  Business strategies and IT goals have a divergent view as early linkage is not established
3.Value is not visible and perceived  -  Modernization initiatives are either not prioritized based on value generation potential  for the business  or such value is not visible enough through the program

Continue reading "Modernization Myth busters!" »

Posted by Baskar Sridharan at 7:11 AM | Permalink | Comments (0) | TrackBacks (0)

Wikipedia refers to Web 2.0 as “web development and web design that facilitates interactive information sharing, interoperability, user-centered design and collaboration on the World Wide Web”.  For the insurance industry that thrives on information and communication, one would consider the advent of new technologies that enable social networking, a web 2.0 tool, a godsend.  But has the insurance industry adopted social networking sites like Facebook, LinkedIn etc. with the expected gusto?  Probably not, if industry analysts’ reports are anything to go by.

Continue reading "Insurance and Social Networking" »

Posted by Sanjaya Kumar at 11:27 AM | Permalink | Comments (7) | TrackBacks (0)

There are varied views expressed by experts in Insurance on legacy systems in Insurance. A significant majority of insurers still have over 70% of their insurance systems as legacy. Because of this, over 70% of the IT budgets are kept aside for keeping the lights on!!  This bothers the business leaders and makes them question the value IT is providing to business.  IT is clearly not in the front seat driving the business unlike in some of the other industries IT drives business results.  Legacy systems also are quoted as the one of the most common reasons for the delays in launching new products. Longer cycle times for application processing, issues in claim processing and poor customer experience are the other common issues that are attributed to the legacy systems.

Continue reading "Insurance Legacy Systems – Ready for a change ?" »

Posted by Siva Nandiwada at 5:19 AM | Permalink | Comments (1) | TrackBacks (0)

Decline in growth opportunities has forced insurers to look outside their traditional products and markets for sustained and profitable growth.  Product innovation has climbed further up in the list of priorities for today's insurer. I think the following are some of the key drivers that necessitate speedy and efficient introduction of new insurance products in the market
• Increased customer needs and expectations
• Demands from distribution channels
• Increased competition in the insurance marketplace
• Heightened regulatory scrutiny and compliance requirements

Continue reading "Product Development Strategies for Insurance Carriers" »

Posted by Sanjaya Kumar at 5:15 AM | Permalink | Comments (2) | TrackBacks (0)

In many ways, the current debate about US healthcare reform is similar to the twin debate expected in near future about retirement benefits reform – the two legs of the crippling public finances the US faces in the next few decades. For far too long, the decision makers on these topics have been more “men” than “statesmen”- able to comprehend and address only the immediate time span for their lives/ careers and ignoring the longer term impacts reaching beyond for the state and its future citizens.

Continue reading "Federal Government or Insurance Carriers- who will be first to get out of the time warp?" »

Posted by George Ignatius at 4:33 AM | Permalink | Comments (2) | TrackBacks (0)

In these times of global uncertainty and budget cuts, insurers are unsure how to decide on spending the limited resources available.  Costs of maintaining existing legacy applications continues to rise and this is leaving very little money left for any discretionary spend. At the same time, business groups are demanding returns on the IT investments.

Continue reading "Optimizing IT investments for Insurance carriers" »

Posted by Siva Nandiwada at 9:22 AM | Permalink | Comments (1) | TrackBacks (0)