“In my own mind there was no way
that platform was going to sustain our
business model,” she says. “I made the
decision that whatever we chose we
wanted to look at scalability. If we as a
company wanted to write another line
of business, I could bolt on another
solution or build out the older one. We
talked about best-of-breed throughout
the development cycle. If I wanted to do
a best-of-breed document management
system instead of what’s native, could
I even do that, and how. We played
through a lot of what-if scenarios and
that was important to see that we not
only selected the right platform, but we
could grow with it and sustain it for the
Business and IT leaders need to
realize that the purchase and implemen-
tation of new systems has to be the start
of a big push to achieve all the benefits
that come from a new system. Carriers
need to build capabilities, according to
Fitzgerald, particularly around customer
engagement with the company, how the
company interacts with suppliers, and
how the company pulls in data and ana-
lytics that it had not previously used.
“How do they identify opportunities
in business approach and regulation?”
asks Fitzgerald. “That’s around processes
with really deliberate innovation. If you
look back 10 to 15 years insurers were
really bad with project management, but
today more professionals on the business
and IT side started getting certified [as
project managers]. Carriers put PMOs
in place and are better about project
governance.”
Expect More Changes
When looking at the capabilities of
new systems, Light believes mobility
is close to a universal need. Light likes
the phrase, “any time, any place, any
platform.”
This is a design feature that vendors
have been hustling to include in the new
releases of their systems, explains Light,
“I didn’t say device independent.
The screen real estate on your iPhone is
much smaller than the flat screen that
sits in your office,” he says. “You have to
make changes in terms of content and
screen flow if you are outputting to an
iPhone or a tablet. This is what the insur-
ance companies are demanding, certain-
ly if they sell personal lines insurance,
but also the business users within the
insurance company who are no longer
chained to their desks. Carriers have to
give close to all the functionality as if the
Petersmark believes one part of the
process that is not going to change for IT
leaders is what he calls the “you bet your
career decisions” when insurers purchase
a new platform.
“Modern systems are more functional and it is easier to swap out a piece of
technology and put another in, but with
the investments being made you are
going to use these systems for at least 10
years and in some cases a lot longer than
that,” he says.
Looking ahead, if carriers expect
their customers to interact in a more
mobile way—and they probably should
expect that—how are they going to han-
dle that, points out Petersmark
“Does the new system have the capa-
bility to do that? If not, will the vendor
assure them those capabilities will be
available down the road?” he asks. “The
same is true of data and analytics. The
industry is just scratching the surface of
the value that is locked up in data stores
for many years. That is going to continue
to be an important way companies can
look at to leverage some competitive
difference.”
Anticipating the needs of customers
is starting to happen now, but Peters-
mark believes it is in the infancy stage.
That is another area carriers have to
consider when they look to purchase
new systems.
“What is it you want to do five years
from now and is the platform you are
going to invest in and the vendor going
to be able to take that journey with you?”
asks Petersmark. “Years ago people didn’t
think about that. There are a lot of bright
software vendors now that are working
hard on things, but it is still a risk—fi-
nancial and political for some who make
the choices—and all that needs to get
weighed.”
Yesterday’s systems were kept longer
than they should have, based on techno-
logical advances and what was available
in the marketplace, points out Peters-
mark. He believes the reason they were
kept longer is partly economic because
the carriers owned the systems, like an
old car.
“Maybe you aren’t making a monthly
payment, but you are putting in a lot of
maintenance,” he says. “It is painful to
get off the old systems. There is a whole
division of IT people that only knows
that platform and 2,000 users that only
know that platform. That was more
important than the economics of a new
system for some.”
Life Expectancy
Celent tells any insurance company
that comes to them that they should be
thinking in terms of a 10- to 15-year
horizon for the useable life of a new pol-
icy system because of the expense, both
in terms of dollars and people to get the
system running,
“You don’t want to have to repeat this
in five years, but the problem is 10 to 15
years out is such a long time that nobody
knows what the world is going to be
like,” says Light.
Light suggests it is important to look
closely at the vendor you choose and
determine if the vendor is financially
strong, has strong management, and is
continuing to grow.
“You also look at the investments
they’ve made over the last two to four
years,” he says. “There are no guarantees
that any new releases with significant
improvements are going to continue,
but you have to base your decision on
something and that’s not a bad thing to
base your decision on.” ITA
