Five Takeaways: CEB TowerGroup Analyzes Insurance Technology Trends
For years, insurers have struggled to develop a truly integrated experience for consumers, distributors, and employees. In 2014, that holy grail will finally be within reach, says CEB TowerGroup’s Karen Pauli. After a period of economic uncertainty and disjointed technology initiatives, insurers now have the opportunity — and the tools — to achieve the seamless, multi-channel business model that has long eluded them.
Pauli’s presentation, “Market Trends & 2014 Initiatives,” was a highlight of the Executive Briefing on Insurance, which we hosted at Hyland headquarters in Westlake, Ohio, in December. The event brought together insurance executives, business analysts and technology experts to discuss the challenges facing the industry and the strategies carriers are using to transform the way they do business.
Here are five takeaways from the CEB TowerGroup session:
1. Develop an agile sourcing playbook
Insurers have long relied on homegrown systems to run their business, but those systems can no longer keep pace with change. Consumers demand a multi-channel experience. They want the option to engage with their carrier online, in person, by phone, or via social media, and their preferences are constantly changing.
To meet these expectations, carriers need to be able to quickly source and implement new solutions, and they must understand their technology options BEFORE specific needs arise. “Insurers must become students of technology,” says Pauli. “Don’t wait until the project lands on your desk to begin your research.”
2. Integration trumps proliferation
To achieve an effective multi-channel strategy, you can’t merely bombard consumers with more and more options, and you can’t simply invest more in your existing channels. “What happens when you throw a gagillion choices inside your existing channels?” asks Pauli. “Number one, it’s super costly. Number two, it forces you to do workarounds.”
Pauli shared an anecdote about paying her insurance bill online at the last-minute, only to learn her carrier’s “online bill pay” required manual processing on the back-end, causing further delays. That’s NOT the kind of multi-channel experience consumers demand!
Before you launch that new smartphone app, examine your existing communications channels to determine what’s working, what isn’t, and how to connect the dots between them. “Engineering a multi-channel customer experience across all our products is super hard. But that’s what we have to do,” says Pauli.
3. Forget the Big Bang
“We need to get away from the Big Bang project mentality,” says Pauli. “We need to get away from Big Bang budgeting and get into portfolio budgeting.”
No single technology investment will cure-all the business issues facing insurers. Rather than look for that silver bullet, insurers should examine their existing technology portfolios to determine which incremental investments will enable them to integrate systems and deliver cross-channel experiences. “There are a lot of components to that answer. But one of the biggest components is your content. Because if you can keep that content flowing, you can keep responding.”
4. Pay less maintenance
While some insurers still spend the majority of their technology budget paying maintenance on legacy systems, the most successful carriers allocate budget equally between maintenance, improvement, and innovation. Overspending on maintenance prevents insurers from acting on opportunities to transform their processes. “That maintenance burden kills insurers,” says Pauli. “Getting out from underneath your maintenance burden and getting on to agile technology clearly is a path to becoming a leading organization.”
5. Put data in the driver’s seat
“Your data is your content, and your content is your foundation,” says Pauli. “More so than almost any industry on earth, the insurance industry is awash in content. We were Big Data before the B and the D were capitalized. It’s not just medical records and policy statements. It’s social media and all that other unstructured data. We need to harness our data and leverage that content to meet the requirements of customers, distributors, and employees.”
Judging by the results of CEB TowerGroup’s survey of more than 230,000 insurance executives, the role that enterprise content management (ECM) plays in coordinating all that data is not lost on insurers. More than 65 percent of those surveyed said that ECM provides very high, high, or somewhat high value to their organization, and 47 percent said that process improvement was the most significant value of ECM.
The takeaway is clear: the foundation of an effective, multi-channel business model is a solid content management strategy.