Q2 | 2019 - Novarica · Novarica’s eighth annual case study compendium includes more than 30...
16
Q2 | 2019 QUANTIFYING DIGITAL VALUE IN INSURANCE PROPERTY/CASUALTY & LIFE/HEALTH/ANNUITY POLICY ADMINISTRATION SYSTEMS VENDORS INSURANCE TECHNOLOGY CASE STUDY COMPENDIUM 2019 2019 COUNCIL MEETING REPORT IT OUTSOURCING IN INSURANCE: CURRENT TRENDS AND KEY ISSUES BUSINESS AND TECH TRENDS IN SPECIALTY LINES
Transcript of Q2 | 2019 - Novarica · Novarica’s eighth annual case study compendium includes more than 30...
Q2 | 2019
QUANTIFYING DIGITAL VALUE IN INSURANCE
PROPERTY/CASUALTY &LIFE/HEALTH/ANNUITY
POLICY ADMINISTRATIONSYSTEMS VENDORS
INSURANCE TECHNOLOGY
CASE STUDY COMPENDIUM 2019
2019 COUNCIL MEETING REPORT
IT OUTSOURCING IN INSURANCE:
CURRENT TRENDS AND KEY ISSUES
BUSINESS AND TECH TRENDS IN
SPECIALTY LINES
2 Novarica Research Quarterly Q2 | 2019
Contents
Research Council StudiesIT Outsourcing in Insurance: Current Trends and Key Issues
2019 Council Meeting Report
Insurance Technology Case Study Compendium 2019
3
CIO Checklists Executive Dashboards and Reporting: Planning and Deployment
14
Executive Briefs & Reports
Insurance Core Systems: Buy or Build?
Quantifying Digital Value in Insurance
Chatbots in Insurance: Overview and Prominent Providers
Digital Claims Payments: Overview and Prominent Solution Providers
Supporting Digital Distribution Channels in Insurance
Claims Fraud Analytics: Overview and Prominent Providers
Insurer-Owned Broker-Dealers: Challenges and Opportunities
Loss Control: Overview and Prominent Providers
Data and Analytics in Insurance: Building the Business Case
Distribution Connectivity Evolution: Overview and Prominent Players
6
Business & Tech Trends
Individual Life
Specialty Lines
Individual Annuity
9
Novarica Market NavigatorsProperty/Casualty Policy Administration Systems
Life/Health/Annuity Policy Administration Systems
10
Presentations/WebinarsNovarica Insurance Technology Webinar: Digital Strategy
Novarica Council Meeting Keynote: Technology, Innovation, and the Future of Insurance
Novarica Insurance Technology Webinar: Data and Analytics
14
Welcome to the Novarica Research Quarterly! Each issue provides a summary of recently published reports, including studies of insurers’ technology experiences, capabilities, and plans from our Research Council; business and technology trends; CIO best practices; vendor information in our Novarica Market Navigators; and recent webinars and presentations. All of the research summarized here is available for download by our advisory clients at novarica.com. Research reports can also be purchased individually.
If you’d like to learn more or arrange a conversation to discuss any of these topics with our senior team, please contact us at [email protected] or 833-668-2742.
3Novarica Research Quarterly Q2 | 2019
Research Council Studies
IT outsourcing has long been an important tool for insurer IT leaders who need to meet increasing business demands. Outsourcing can be an effective way to staff transformational projects and meet capacity needs, but it’s neither a silver bullet nor a simple process.
Strong relationship management is a crucial success factor for any outsourcing engagement. Insurers are advised to take care when managing their relationships with outsourcing partners. This report presents data from a recent study of 71 insurers on their utilization, plans, challenges, and goals.
Key Points and FindingsInsurers outsource 25%-30% of their IT teams on average. Specific levels vary from 0% to as much as 90% as strategic business needs dictate.
Cost is not the key driver unless outsourcing is a long-term strategy. Most insurers outsource to meet skills or capacity needs for critical transformation projects or rapid business growth.
Project management is the key. Insurers are least satisfied with their partners’ (and their own) project management abilities, which can decrease overall value of the relationship.
Topics• Outsourcing utilization and drivers. Benchmarking
information for insurers.
• Future outsourcing plans and reasons for change, including whether original drivers continue to obtain.
• Managing the outsourcing relationship. Key satisfaction and self-assessment metrics
Matthew [email protected]/CEO
| 13 Pages
4 Novarica Research Quarterly Q2 | 2019
The Novarica Insurance Technology Research Council is a knowledge-sharing community of more than 300 CIOs and insurer IT leaders with a mission to strengthen the industry’s ability to leverage technology effectively. The 12th annual Council Meeting brought together more than 100 members for a series of presentations, panels, workshops, and direct networking events in support of this mission. This report contains brief summaries of the keynote presentations and workshops.
Matthew [email protected]/CEO
Key Points and FindingsInnovation experiments are expanding, but operationalization remains a challenge for insurers who lack the organizational incentives to try new products and processes.
Digital, data, and core initiatives have impact across the value chain. While many insurers think of digital in terms of distribution or analytics in terms of underwriting and claims, these technologies are being leveraged to make all insurance processes faster and smarter.
IT leadership isn’t about IT, it’s about leadership. Managing teams, individuals, and executive relationships are the most important skills for CIOs.
Topics• The Three Levers of Value and how to frame technology investments in business value terms.
• Innovation and emerging tech, including the importance of culture and organizational incentives.
• Preparing for change in required capabilities and organizational needs.
| 22 Pages
5Novarica Research Quarterly Q2 | 2019
Novarica’s eighth annual case study compendium includes more than 30 detailed examples of IT initiatives that delivered real business impact.
Each case details business goals, project sponsors, team structure, project timeline, tools and technology used, challenges faced, success factors, and business results delivered.
Novarica Impact Awards, voted on by 50 CIOs, recognized winners in four categories: digital, data/analytics, core, and IT practice or infrastructure.
Key Points and Findings Artificial intelligence, big data, and analytics adoption is growing and has produced tangible, quantifiable benefits in underwriting and risk selection.
Core is moving to the cloud, especially for de novo systems for new lines of business.
Digital capabilities like self-service and mobile access have made their way into more complex lines like workers’ compensation and commercial auto.
Innovation remains an area of proactive investment, and insurers are investing in formal practices that have led to measurable results.
2019 Winners • Amerisure for its Digital Innovation practices (IT practice or infrastructure)
• AXA XL for its use of NLP to review property risk engineering surveys (data and analytics)
• Bankers for its IM platform and chatbot for claims and underwriting inspections (digital)
• CapSpecialty for its cloud-based straight-through processing platform (digital)
• Farm Bureau Financial for its stand-alone IT intern team (IT practice or infrastructure)
• Gerber Life for its digital sales and underwriting system (core)
• Northbridge Financial for its core platform supporting commercial business (core)
• StarStone for its use of machine learning to classify risks (data and analytics)
DIGITAL CASES
Bankers
CapSpecialty
Amerisure
BerkleyNet
COUNTRY Financial
Everest
NAS Insurance Services
Nationwide
Prudential
State Auto
Victor
West Bend Mutual
Zurich
DATA AND ANALYTICS CASES
AXA XL
StarStone
Everest
Pekin Insurance
Principal
CORE SYSTEMS CASES
Gerber Life
Northbridge
AF Group
American Life & Security
Cerity
Everest
Funeral Directors Life
Great American
MetLife
Principal
Prudential
QBE Insurance
Symetra
Velocity Risk
IT PRACTICE OR INFRASTRUCTURE CASES
Amerisure
Farm Bureau Financial
Everest
Shelter
| 50 Pages
Matthew [email protected]/CEO
6 Novarica Research Quarterly Q2 | 2019
Jim [email protected], Research & Consulting
Jeff [email protected], Research & Consulting
Insurers are increasingly interested in chatbots for call centers and self-service portals as an opportunity for a low-cost, low-touch, modern channel. As the technology continues to mature, both tech giants and startups are trying to gain a foothold in the space.
This report provides an overview of insurance use cases, the state of chat technology, its intersection with artificial intelligence, and managing potential customer concerns. It also provides brief profiles of insurance-focused providers including Elafris, Hi Marley, LeO, Spixii, and others, including Avaamo, Glib.ai, IBM Watson, Interactions, Pypestream, Rozie AI, Sentimer, SmallTalk.Agency, and [x]cube LABS.
| 12 Pages
A few innovations have improved the process of issuing claims payments over the years: the introduction of ACH (automated clearing house) and EFT (electronic funds transfer). But the rising cost of paper checks and evolving customer expectations have encouraged carriers to investigate in additional payment-issuing capabilities.
This report discusses the business drivers and benefits of new payment possibilities as well as challenges to consider. This report also provides an overview of prominent providers in the space, including Bankable, Checkbook, Dream Payments, Fiserv, Hyperwallet, Ingo Money, InsurPAY, One Inc., Paysurance, PayPilot, VPay, and Commerce Bank.
| 10 Pages
Alan [email protected], Research & Consulting
Executive Briefs & Reports
Custom building core systems remains uncommon, though instances have increased over the last few years as several carriers embarked on multi-year efforts to build policy, billing, or claims systems. Many others have given serious consideration to build as a viable alternative to implementing a vended solution but have opted to buy.
This brief addresses arguments for and against core custom builds—some of which are legitimate and others of which don’t withstand serious scrutiny. It also outlines the key capabilities IT organizations need to deliver successful custom builds as well as how to evaluate these as part of a maturity assessment. The brief also reviews some risk mitigation approaches like leveraged builds and co-development.
This brief primarily focuses on core systems, though the same concepts apply to any complex custom development effort.
| 10 Pages
Insurers across the industry are prioritizing investment in digital initiatives. Because of the broad range of meanings for “digital” and because insurers often struggle to track success metrics for technology investments, it can be difficult to turn high-level organizational priorities into concrete project approvals. But as more case studies of digital projects are made public, there are opportunities for insurers to compare their projects to peers and to generate informed assessments on expected benefits of digital projects.
This report highlights successful digital initiatives selected from over 100 case studies and provides examples of concrete success metrics. The report also reviews best practices for measuring digital project results.
| 8 Pages
Martina [email protected], Research & Consulting
Martin [email protected], Research & Consulting
Jeff [email protected], Research & Consulting
Stephanie [email protected] Associate Deb Culliton
[email protected] VP, Research & Consulting
7Novarica Research Quarterly Q2 | 2019
Insurance carriers continue to evaluate and adjust their distribution channel strategies in search of optimal growth and profitability. Agents and brokers continue to invest in the use of technology to differentiate their brand, services, and customer experience.
Technology now enables carriers to work directly with their distribution channel to grow the digital pipeline through an orchestration of timely, targeted, informed, and engaged digital events. However, not all carriers are positioned to orchestrate the experience and capitalize on the opportunity. This brief outlines nine key principles CIOs can embrace with their teams when pursuing digital transformation with their distribution channel.
| 6 Pages
Kevin [email protected], Research & Consulting
Tackling fraud isn’t new for insurers; most have been using SIU organizations for decades. However, property/casualty insurers are now digitizing claims processes, creating challenges for traditional fraud detection, which relies on human assessment. Fraud analytics provide digital capabilities to identify fraud in real time, at FNOL, and during the claim life cycle.
This brief provides an overview of fraud in the insurance industry and an overview of claims fraud analytics technology. It also profiles providers in this space, including BAE Systems NetReveal Property & Casualty Insurance Fraud, DXC Fraud Analytics Suite, FRISS, Mody Data Solutions, SAS Detection and Investigation for Insurance, Shift Technology, and Verisk ISO Claim Solutions.
| 14 Pages
Eric [email protected], Research & Consulting
Deb [email protected] VP, Research & Consulting
Insurer-owned broker-dealers face a range of issues—and risk sub-optimal results—when their parent companies seek economies of scale. This drive has notable implications for managing, using, and governing data, which is central to operating advice-driven businesses like broker-dealers. The regulatory landscape also factors in.
Understanding unique broker-dealer needs may be an important counterweight to optimization efforts, which focus on the enterprise to the detriment of the unique data, managerial, and governance needs of the broker-dealer units.
This brief explores issues in key areas like ease of doing business, the distinctive needs of these specialized “utility” organizations, and the data management that is foundational to their effective operation.
| 10 Pages
Rob [email protected], Research & Consulting
Life insurance core systems transformation projects are complex and expensive. Before proceeding, insurers should carefully analyze their options for each affected block of business.
An effective block analysis provides insights into how a transition will affect different products and lines of business, creates a broader understanding of relative costs and benefits, and provides a rational framework for executive decisions.
| 13 Pages
Deb [email protected] VP, Research & Consulting
8 Novarica Research Quarterly Q2 | 2019
While the traditional means of agency interface capabilities built on real-time upload/download methodologies are still alive and well, there has been a significant increase in offerings available in the market. These services provide carriers with the opportunity to differentiate and expand their digital capabilities for engagement with their distribution channel partners, or even directly to their customers. Unfortunately, sometimes it can be difficult to distinguish what is new or different about the offerings in the market or what specific business value insurance carriers can expect to gain from an investment in these market offerings.
This report takes a deeper dive into the market offerings that extend traditional agency management interface capabilities and provide insureds with opportunities to enhance, and potentially transform, their distribution and customer experiences with digital offerings for orchestrating appetite selection, new business submission processing, and quote-bind-issue services.
| 10 Pages
Kevin [email protected], Research & Consulting
Stephanie [email protected] Associate
Eric [email protected], Research & Consulting
Insurers recognize the value that data and analytics offer but can have challenges quantifying or realizing that benefit. By focusing on specific use cases tied to the Three Levers of Value (“Sell More,” “Manage Risk Better,” and “Cost Less to Operate”), insurer data and analytics leaders can help set expectations and measure the business value of their initiatives.
This brief includes survey data showing where insurers are deploying analytics and case studies of more than a dozen successful analytics deployments that have resulted in quantified or clearly defined business value.
| 10 Pages
9Novarica Research Quarterly Q2 | 2019
Business & Tech Trends
Steven [email protected], Research
Key Points and FindingsProduct innovation and speed to market are key to growing market share. Improved product modeling and management capabilities are vital to revenue growth in a highly competitive market.
Carriers are improving customer experience with straight-through processing (e-apps, e-delivery, e-signature) but still have work to do, especially in post-issue service. Efforts to improve customer service are driving interest in document management/CCM solutions. Post-issue service capabilities lag comparable functionality in other lines of business.
Successful carriers are expanding use of business intelligence and analytics solutions to recognize and analyze market trends, product adoption, and producer performance. Some carriers are using AI for customer service or underwriting.
Individual life carriers seek to differentiate themselves in a competitive marketplace through investments in analytics, core systems, and marketing- and service-related technologies.
This report provides an overview of individual life carriers’ business and technology issues, data about the marketplace, and several examples of recent technology investments by individual life carriers.
Topics• Recent market and financial trends
• Active insurer landscape
• Technology issues, priorities, and examples by functional area
• Top technology priorities for 2019 and beyond
| 20 Pages
Rob [email protected], Research & Consulting
10 Novarica Research Quarterly Q2 | 2019
Specialty carriers have traditionally made less use of automation than insurers in other sectors. They are now differentiating themselves in a competitive marketplace through investments in distribution (especially new business submission), product development, underwriting, and claims.
This report provides an overview of specialty carriers’ business and technology issues, data about the marketplace, and several examples of recent technology investments by specialty carriers.
Key Points and Findings Carriers are pursuing long-term data strategies. Specialty carriers are prioritizing reporting tools and investing in data science capabilities to optimize their portfolio and improve underwriting.
Improved underwriting and product development flexibility are key considerations. Carriers are upgrading to highly configurable policy administration systems to improve underwriting and enable product development flexibility to speed entry to profitable niches.
Specialty insurers are investigating automation support for ingesting new business application documents, although these solutions are still immature. Digital broker platforms and API catalogs are also assisting in automation.
Topics• Recent market and financial trends
• Active insurer landscape
• Technology issues, priorities, and examples by functional area
• Top technology priorities for 2019 and beyond
| 17 Pages
Eric [email protected], Research & Consulting
Chuck [email protected], Research & Consulting
Steven [email protected], Research
11Novarica Research Quarterly Q2 | 2019
Key Points and FindingsSelf-service is key for cost containment and customer satisfaction. With a push to lower fees, producers need to grow their client base to make up for lost income—but an increased compliance workload makes serving that base challenging.
Speed to market and product design are vital for sales growth. Business intelligence and core systems investments continue to be critical in improving time to market and product flexibility.
IT is partnering with operations, actuarial, and underwriting to drive efficiency and value. These partnerships are also raising the issue of talent management, whether rotating internal staff or sourcing talent externally.
Regulatory changes will continue to impact the annuities market in the near term. While the DOL guidelines are all but gone, additional NAIC, SEC, and state regulations will replace them.
The individual annuity market faces continuing competition from alternative wealth products. Carriers are looking to deepen existing distribution relationships, expand new channels, and improve transparency.
This report provides an overview of individual annuity carriers’ business and technology issues, data about the marketplace, and several examples of recent technology investments by individual annuity carriers.
Topics• Recent market and financial trends
• Active insurer landscape
• Technology issues, priorities, and examples by functional area
• Top technology priorities for 2019 and beyond
| 20 Pages
Steven [email protected], Research
Deb Culliton [email protected] VP, Research & Consulting
Chris [email protected], Research & Consulting
12 Novarica Research Quarterly Q2 | 2019
Novarica Market Navigators
This report provides an overview of the available policy administration systems and suites for US property/casualty insurers. It contains profiles of 42 solutions, summarizing the vendor organization, technology, differentiators, client base, lines of business supported, deployment options, implementation, upgrades/enhancements, and key functionality.
Vendors included: AdvantageGO, Beyontec, BriteCore, CGI, CodeObjects, Decision Research Corporation, Duck Creek, DXC, eBaoTech, Ebix, ECCA, EIS Group, eSURETY, Finys, Focus Technologies, Guidewire, Instanda, Instec, Insurance Systems Inc., Insuresoft, Insurity, Majesco, MFX, OneShield, Origami Risk, PCMS, Policy Administration Solutions, SAP SE, Sapiens, Solartis, SpeedBuilder Systems, Sunlight Solutions, TCS, Ventiv, Verisk, and West Point Insurance Services.
| 583 Pages
Martina [email protected], Research & Consulting
Jeff [email protected], Research & Consulting
Deb [email protected] VP, Research & Consulting
13Novarica Research Quarterly Q2 | 2019
This report provides an overview of the available policy administration systems and suites for US life/annuity/health insurers. It contains profiles of 24 vendor solutions, summarizing the vendor organization, technology used, differentiators, client base, lines of business supported, deployment options, implementation approaches, upgrades/enhancements, and key functionality.
Vendors included: Accenture, Andesa Services, Concentrix, DXC, EIS Group, EXL, FAST, FIS, Infosys McCamish, InsPro Technologies, InsurIQ, iPipeline, LIDP Consulting Services, Majesco, Management Data Inc., Mphasis, OneShield, Oracle, QLAdmin Solutions, SAP SE, Sapiens, Tata Consultancy Services, and Vitech Systems Group.
| 327 Pages
Rob [email protected], Research & Consulting
Tom [email protected], Research & Consulting
Chris [email protected], Research & Consulting
14 Novarica Research Quarterly Q2 | 2019
Presentations/Webinars
Chuck [email protected], Research & Consulting
Nancy [email protected] VP, Research & Consulting
Digital strategy is more than just deploying effective portals. It means rethinking the relationship between stakeholders, information, and processes in light of modern technology capabilities. Effective digital strategies re-align organizations, focus IT investments, and provide an effective guide to make the numerous decisions required across digitalization efforts. This webinar includes best practices, benchmarks, and examples of effective digital initiatives across the value chain.
CIO Checklists
A data and analytics platform is an important and complex investment for a company. There are numerous necessary considerations—from business cases to data infrastructure to security. Dashboards and reports are the main elements that business executives and stakeholders will consider as they evaluate the investment.
This checklist is designed to help insurer technology leaders ensure that dashboards and reports deliver a delightful user experience, ensure wide adoption, improve business results, and gain continuous support of the platform.
| 6 Pages
9 Plan each communication opportunity
9 Establish internal support
9 Speak their language, not IT’s
9 ABC—always be contextual
9 Keep things simple
9 Talk about organizational benefits, not technology capabilities
9 Present options, but be clear about which one is best and why
9 Paint a picture of what the organization looks like after the effort
9 Don’t hide the risks
9 Recap and ask for support
9 Return with progress reports—good, bad, and ugly
The Checklist
Alan [email protected], Research & Consulting
15Novarica Research Quarterly Q2 | 2019
Our 12th annual Research Council meeting was attended by more than 100 CIO and insurer IT leader members of the Novarica Insurance Technology Research Council.
A recording of the keynote presentation on technology, innovation, and the future of insurance is available to Novarica clients and Council members.
The insurance industry has embraced data analytics to drive business results. Using large warehouses of internal data, augmentation from third-party providers, and big data sources, data analysts are driving product R&D, predictive modeling, and influencing strategy at all levels of the organization. However, many insurers are still dealing with the challenges of diverse core systems with little data integration and limited agreement on what data assets mean. This webinar covers current insurer experience, case studies of successful initiatives, and best practices in developing a data and analytics strategy.
Mitch [email protected], Research & Consulting
Eric [email protected], Research & Consulting
Matthew [email protected]/CEO
Novarica helps more than 100 insurers make better decisions about technology projects and strategy through research, advisory services, and consulting.
We serve clients in life/annuity/retirement, property/casualty, workers’ compensation, and reinsurance. Our clients range from Fortune 100 insurers to small regionals and specialty companies. Although most of our clients prefer we keep their names confidential, a partial client roster includes Amica, AXA XL, GenRe, Grange, Hanover, Penn Mutual, ProSight, Sammons, SECURA, and SunLife.
Our senior team has direct experience as senior IT executives at firms including AIG, Arbella, AXA, Guardian, Liberty Mutual, MetLife, Marsh, Progressive, Prudential, Travelers, Voya, and others.
We publish frequent, independent, in-depth research on trends, best practices, and vendors. Our research projects are directed by our senior team and leverage the knowledge of more than 300 insurer CIO members of our Research Council. All reports are available to our clients without seat license restrictions.
Our Strategy-as-a-Service advisory services provide on-demand phone and email consultations on any topic in insurance or technology (as well as full access to our library). Our clients have told us it’s like having a team of experts down the hall—for a flat annual fee that is a small fraction of the cost of a single employee.
Our consulting services include vendor selection, benchmarking, project assurance, and IT strategy development. They are based on our deep knowledgebase, extensive relationships, personal experience, and proven methodologies. Our clients get rapid, actionable insights and guidance delivered directly by our senior team.
© 2019, Novarica, Inc. All rights reserved.
linkedin.com/company/novarica
@novarica
novarica.com/podcast
Novarica, Inc.280 Summer Street, 6th FloorBoston, MA [email protected]
![[3] Fatigue on engine pistons – A compendium of case studies](https://static.fdocuments.net/doc/165x107/5530cccf55034681738b487d/3-fatigue-on-engine-pistons-a-compendium-of-case-studies.jpg)