New technology for a midtier insurance carrier requires new
tools, even if IT leaders are charged with doing the same things
they have done in the past. How carriers choose to deal with
those strategic issues is one of the top priorities for IT leaders
this year, according to Chuck Ruzicka, vice president of research
and consulting at Novarica.
“People have to get their heads around new technology and
how you manage things before you can put an agile process on
top of that,” said Ruzicka, author of “Insurance IT Practices and
Disciplines,” which is based on a survey of Novarica’s research
council. “You put time pressures
on existing practices and that is
tough to do. Usually, IT has been
streamlined and so this means you
have to take on additional respon-
sibilities. That’s a challenge for IT.”
Finding and retaining talent is
another priority listed in the report.
Ruzicka points out IT staffers want
to work with new technology and
there is a demand for that talent,
particularly when companies look at
mobile applications or data analytics.
Many universities have been
unable to graduate students who are trained in those spaces
because most schools don’t have the newer technology available
for students to use in training.
“You have to bring people up to speed and that’s risky,” says
Ruzicka. “If you are dealing with larger labor pools and com-
panies with mobile practices, it is easier for them to extend and
Many insurers turn to bi-modal IT management because the
demands of innovation and the complexities of core systems are
often in conflict.
“It started with agile development teams having different
ways of doing things,” says Ruzicka. “Now you have people
demanding innovation, but the core processes are designed to
manage change in a bureaucratic way, which is slow.”
For those looking to experiment, there is a second mode
of operation, such as Fast, but the two cultures—Core and
Fast—tend to confuse each other, explains Ruzicka. The survey
showed some insurers want to establish experimental develop-
ment teams, but that often means going to Silicon Valley where
they are more likely to find an entrepreneurial spirit.
Getting Better All the Time
Many insurance IT leaders have a simple goal: Improve the way they run their
business. If only it were that easy.
“Having the two co-exist is the bi-model nature,” says
Ruzicka. “I would say, even on the P&C side, you see people
experimenting with Fast. Larger companies have the money
to formalize the process and create remote development sites.
They are betting on the innovation. Digitization needs to
respond to consumer expectations so they are bringing in new
In the report, more than half of Novarica’s respondents ex-
plained they are expanding their work in agile development and
master data management. Ruzicka points out that with agile
there are many definitions of what that means.
“Organizations struggle with perceptions that agile is undisciplined, but in reality I’ve seen people manage agile projects
and had better metrics around what is being delivered than the
large-scale waterfall projects,” he says.
Ruzicka is an advocate of agile develpment, but admits it is
difficult for organizations to create an agile process for project
evaluation and requirement settings when they have the typical
backlog being developed under more traditional methods.
“To do agile you have to have detailed stories,” he says, “There
are challenges for companies to transition their planning, which
is more traditional. I think you see agile for new functionality
where there is strong ownership. A multi-divisional company
trying to build an enterprise solution by committee doesn’t lend
itself to the agile process. I thing the issue is transitioning from
ideas and requirements into an agile pipeline. You still have
generational gaps where some senior people aren’t as comfortable
with agile, but its use is pervasive in our industry and others.”
Another concern involves the data a company captures. If a
carrier has an older system, it likely wasn’t designed to perform
analytics, so the data is not easy to extract. This creates breaks in
service that impact the customer experience.
Ruzicka recites a typical story. one that involves his daughter
who was looking for personal auto quotes and her reaction was
that a leading competitor’s website was hard to navigate so she
didn’t bother to ask for a quote.
“I thought young people would be more price conscious, but
in reality many Millennials have a short attention span,” he says.
“Older systems are not as responsive to their needs, so there is
an impact on new sales and service. If your website isn’t responsive, shoppers aren’t going to have tolerance. There are companies whose book of business is mature and they think they are
OK, but in reality [the book] is eroding and they need to invest
in new technology to be relevant for the future.” ITA