Embed Size (px)
Citation preview
Q3 | 2017
INSURETECH FOR INSURERS
BILLING SYSTEMS VENDORS
BEST PRACTICES FORCUSTOMER PORTAL
IMPLEMENTAION
100DATA, DIGITAL, AND CORE CAPABILITIES
FOR INSURERS
ENABLING INNOVATION, VOL. 2
BUSINESS AND TECH TRENDS IN
COMMERCIAL LINES
2 Novarica Research Quarterly Q3 | 2017
Contents
Council Studies & SurveysThe Novarica New Normal for Insurers: 100 Digital, Data, and Core Capabilities
11 CIO Checklists Best Practices for Customer Portal Implementation
Optimizing the IT-Finance Relationship
5 Executive Briefs & ReportsInsureTech For Insurers: 80 Startup Profiles
Enabling Innovation, Vol. 2: More Lessons From Silicon Valley
Payment Gateways in Insurance
Key Issues and Best Practices in SAAS Escrow
Emerging Trends in Annuities
Augmented and Virtual Reality: Potential Use Cases for Insurers
Cybersecurity Assessment: Key Issues and Prominent Providers
Key Issues and Challenges for Insurers Chief Data Officers
12 Novarica Market Navigators BPO-BPaaS Providers for L/A Insurers
BPO-BPaaS Providers for P/C Insurers
Life/Health/Annuities Billing Systems
Property/Casualty Billing Systems
9 Business & Tech TrendsCommercial Lines
Defined Contribution Retirement Plans
15 Popular Novarica Blog PostsNews and issues analysis from our senior team
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 617-342-8100.
3
3Novarica Research Quarterly Q3 | 2017
Council Studies & Surveys
Primary Report Contact
PAGE COUNT60
The Novarica New Normal 100 (3N100) is a list of 100 technology-enabled business capabilities that represent the “new normal” for insurers. They span product development, marketing, distribution, underwriting, customer engagement, billing, claims, and finance/operations functions as well as digital, data and analytics, and core technology areas.
This report explains the 3N100 and provides analysis of deployment data from a survey of many insurers. It also includes a self-benchmarking tool for carriers.
Key Points and FindingsCarriers’ capabilities are improving. Average maturity scores were up a modest but measurable amount in most functional areas.
Digital and data remain more advanced than core. Carriers continue to add capabilities in digital and data wraps while deferring major action on complex legacy system overhauls.
Pilot programs are producing value. For multi-year study participants, many of 2016 pilot programs progressed to yield “some” or “mature” capabilities for insurers.
Topics• Understanding digital, data, and core capabilities across functional areas.
• Current deployment rates of specific capabilities.
• Areas of significant improvement from the 2016 3N100 survey.
• Using the benchmark tool to assess current position and track progress.
4 Novarica Research Quarterly Q3 | 2017
Executive Briefs & Reports
Key Points and Findings InsureTech is not the same thing as disruption. This industry (and the media) tend to link InsureTech and disruption. But the reality is that most InsureTechs provide opportunities for insurers rather than potential threats.
InsureTech carriers and distributors are focused on customer experience. With almost no exceptions, carrier/broker startups take advantage of the insurance industry’s failure to build better interactions for consumers.
“Doing nothing” is always an option. With so much emerging technology and so many startups, all insurers must intelligently choose where to focus their attention and—just as important—what to ignore.
Topics• Types of InsureTechs. Novarica categorizes the startup environment for easy classification.
• Engaging with InsureTech. Various alternatives for CIOs to deal with startups are available.
• InsureTech Profiles. The 80 vendors profiled in this report serve as a starting point for insurers learning about InsureTech.
Most of the research and media focused on InsureTech startups is written for innovators and investors, not for insurers. This report profiles 80 InsureTech startups—including Analytics Arms Dealers, Beneficial Bots, Creative Carriers, and Digital Distributors—from the point of view of insurers. It focuses on two key questions: Does this matter to my company, and what can we learn from it?
Primary Report Contact
PAGE COUNT49
5Novarica Research Quarterly Q3 | 2017
Silicon Valley is often championed as the leader of technology innovation. While the Valley seems to hold the optimal blend of talent, capital, and ideas, there is no single formula that produces innovation. As insurers are increasingly expected to bring innovation in-house, operationalizing innovation is becoming imperative. The insurance industry is ripe for the type of disruption that the Valley offers, and carriers can take away valuable lessons to prepare to lead their organizations into the future.
This brief explores insights and best practices for insurers from Novarica’s Silicon Valley Innovation Tour in the third quarter of 2017.
Primary Report Contact
PAGE COUNT9
Key Points and Findings R&D is often spelled M&A. Silicon Valley provides many opportunities for carriers to invest in and partner with startups producing innovative technologies.
Innovation starts at the top and trickles down. It’s not enough to confine innovation to a lab; successful innovation is driven by executive leadership and permeates enterprise-wide.
The talent landscape is shifting. Organizations throughout the Valley are looking for creative solutions to challenges in attracting and retaining talent, specifically women, in technology.
Topics• Engagement. How companies can engage with innovation in the Valley.
• Environment and Culture. How organization and culture can enable innovation.
• Human Capital. The changing employee landscape and pipeline.
6 Novarica Research Quarterly Q3 | 2017
This brief provides an overview of the increasing use of payment gateways across the insurance industry. It explores how payment gateways can help carriers respond to a variety of possible challenges and provides an overview of trends and changes in the vendor landscape.
It also includes information on representative vendors, including traditional payment processors like ACI; Fiserv; Chase Paymentech; and Western Union and newer players like Bill2Pay; BillItNow; Input1; KUBRA; and One, Inc.
Primary Report Contact
PAGE COUNT8
Insurers are increasingly turning to cloud- and SaaS-based products for their relative ease of deployment, cost savings, and security. Despite this growing popularity, there are few best practices surrounding escrow in the event of business interruption at a service provider.
The escrow of SaaS applications goes beyond the needs of traditional software. Though not top of mind for most organizations today, insurers will eventually need to prepare their organizations for recovery and business continuity. This brief outlines key considerations and best practices for insurers in escrowing SaaS applications in the event of business interruption.
Primary Report Contact
PAGE COUNT6
7Novarica Research Quarterly Q3 | 2017
Augmented Reality (AR) and Virtual Reality (VR) are among many evolutionary technologies making inroads into conversations at all levels of technology leadership. These separate and distinct technologies may represent another channel through which insurance companies can serve digitally immersed stakeholders.
They have potential real-world implications that span risk mitigation, improved efficiency and loss ratios, and enhanced customer experience. The effect of VR and AR on the insurance industry will be most impactful over time, and their potential to influence and enhance the customer experience is thought-provoking.
Primary Report Contact
PAGE COUNT6
The era of defined-benefit retirement plans is over, and the market need for “private pension” plans to provide a secure stream of income for retiring Boomers is an opportunity for annuities carriers. But recent trends pose significant challenges for those same carriers, including low interest rates, regulatory changes, lower fees, and negative market perceptions. Carriers are reacting with strategies targeting specific customers through clearly defined distribution and increased focus on products targeted at the defined customer.
This brief outlines the current state of the annuities market and key trends in annuity carriers’ responses to those challenges.
Primary Report Contact
PAGE COUNT7
8 Novarica Research Quarterly Q3 | 2017
This brief reviews key areas insurers should consider for cybersecurity assessment along with profiles of ten prominent solution providers.
Insurers need to assess governance (frameworks, compliance, and awareness), assets (device, application, and data security), and support (monitoring, testing, incident response, etc.)
Short profiles are provided for solution providers who offer insurance-specific cybersecurity assessments and have clients that are currently conducting or have recently completed an assessment.
Primary Report Contact
PAGE COUNT11
Data is growing increasingly important as carriers continue to digitize their businesses. It has become key to the initial design of products, marketing those products, and the end-to-end processing of those products, whether through direct channels or through agent and broker channels. Most carriers have designated a chief data officer or equivalent role to be responsible for data, but maturity in this area ranges widely across the industry. The more architecturally advanced a carrier is, the more likely they are to use new technology and tools and to get more value from higher quality data. Data security still represents a significant challenge, especially in light of evolving regulations.
Primary Report Contact
PAGE COUNT6
9Novarica Research Quarterly Q3 | 2017
Business & Tech Trends
Commercial lines insurance is being transformed by technology. While digital distribution, mobile, and drones are playing an increasing role, commercial lines carriers are focused primarily on modernizing policy administration systems as well as improving agent portal functionality, claims administration and service, business intelligence, and predictive analytics.
This report provides an overview of commercial lines carriers’ business and technology issues, data about the marketplace, and more than 80 examples of recent technology investments by commercial lines insurers.
Key Points and Findings Drones, IoT, robots, and autonomous vehicles are transforming the industry. These technologies are reducing the need for on-site adjusters and investigators while greatly improving underwriting and pricing, as well as lowering claims frequency.
Agent portals remain key to customer acquisition and retention, and direct sales capabilities will be increasingly important for more transactional products and program business. Agents and carriers should be spending their time solving client problems, not taking orders or pushing products.
Mobile devices continue to make inroads in commercial lines. Besides loss control, other functions include field underwriters, premium auditors, and claims adjusters.
Topics• Recent market and financial trends
• Active insurer landscape
• Technology issues, priorities, and examples by functional area
• Top technology priorities for 2017 and beyond
Primary Report Contact
PAGE COUNT31
10 Novarica Research Quarterly Q3 | 2017
Primary Report Contact
PAGE COUNT32
Key Points and FindingsSelf-service and transactional capabilities matter. Agent and customer portals continue to be viewed as key elements of acquiring and retaining customers.
Predictive analytics continue to be used across the enterprise. Analytics are being applied to many aspects of the insurance process beyond pricing and loss prediction.
Effective and efficient core system workflows are vital to lean operations and rapid product launch. Carriers that have completed these investments are accelerating expansion of their digital and data capabilities.
In what remains a highly competitive line of business where scale can have a significant impact on overall success, carriers are focused on driving down costs and attracting new clients, all while retaining existing clients and assets through improved insights and investment performance.
This report provides an overview of defined contribution retirement plan business and technology issues, data about the marketplace, and more than 30 examples of recent technology investments by defined contribution retirement plan insurers.
Topics• Recent market and financial trends.
• Active insurer landscape.
• Technology issues, priorities, and examples by functional area.
• Top technology priorities for 2017 and beyond.
11Novarica Research Quarterly Q3 | 2017
CIO Checklists
9 Develop from the customer’s perspective
9 Make omni-channel an inherent part of the design
9 Design for maximum leverage across the distribution chain
9 Create a functional road map
9 Build a healthy “household”
9 Test often and leverage feedback
9 Implement a cross-function governance structure
9 Build partnerships for implementation
9 Plan for the long term
Today’s customers expect a unified, user-friendly digital experience which they can leverage, on-demand, from the channel of their choice. This can be a challenge for insurers, whose traditionally siloed lines of business may have little internal cooperation. Nevertheless, carriers increasingly need to be aware of the broader competitive landscape that defines financial services—and the digital user experiences that consumers have come to expect. For carriers, the functional, online consumer-facing portal has increasingly become a baseline expectation across all lines of business.
This checklist is designed to help insurer CIOs define and focus on the most important elements in standing up a consumer portal, including how to best leverage the investments made in these critical capabilities.
Primary Report Contact
PAGE COUNT10
9 Engage regularly
9 Speak their language
9 Explain emerging technology
9 Support long-term planning
9 Understand OpEx vs. CapEx impacts
9 Create service-level metrics
9 Support finance’s technology needs
9 Adopt sourcing discipline
The CIO-CFO relationship is a critical part of achieving IT’s objectives. The CFO controls the purse strings, which can impact the CIO’s ability to honor existing service commitments. In this Executive Brief, Novarica identifies eight practices for CIOs to nurture a better partnership with their CFOs.
The foundation of this partnership comes from establishing regular contact, including discussion of issues relevant to finance in a way that non-technical executives can comprehend. It is possible to build on that foundation by demonstrating competency with long-term plans, implementing strong sourcing practices, and running IT as a business. Additionally, the relationship can be maintained by collaborative decision-making and offering support to finance objectives and operations.
Primary Report Contact
PAGE COUNT8
12 Novarica Research Quarterly Q3 | 2017
This report provides an overview of 13 BPO-BPaaS providers to North American life/annuity insurers with a focus on their experience levels in key functional areas. The report contains a brief profile of each vendor, including a chart detailing the provider’s experience levels in specific, targeted, functions.
Providers included: Capgemini, Cognizant, Concentrix, DXC Technology, EXLService Holdings, Genpact, Infosys Limited, NIIT Technologies, NTT DATA, SE2, TCS, Wipro Limited, and WNS.
Primary Report Contacts
PAGE COUNT48
Novarica Market Navigators
This report provides an overview of 14 BPO-BPaaS providers to North American property/casualty insurers with a focus on their experience levels in key functional areas. The report contains a brief profile of each vendor, including a chart detailing the provider’s experience levels in specific, targeted, functions.
Providers included: Blue Cod Technologies, Capgemini, CGI, Cognizant, Covenir, DXC Technology, EXLService Holdings, Genpact, Infosys Limited, NIIT Technologies, ResourcePro, Solartis Administer, TCS, and WNS.
Primary Report Contacts
PAGE COUNT45
13Novarica Research Quarterly Q3 | 2017
This report provides an overview of the available stand-alone billing systems for US life/health/annuities insurers. It contains profiles of each of eight vendor solutions, summarizing the vendor organization, technology used, differentiators, client base, lines of business supported, deployment options, implementation approaches, upgrades and enhancements, and key functionality.
Vendors included: DXC Technology, EIS Group, Infosys Limited, Majesco, OneShield, Oracle, Vitech Systems Group, and VUE Software.
Primary Report Contacts
PAGE COUNT61
This report provides an overview of the available stand-alone billing systems for US property/casualty insurers. The report contains profiles of each of 15 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: Adaptik Corporation; Billing Management Services, LLC; Duck Creek Technologies, Inc.; DXC Technology; EIS Group; Guidewire Software Inc.; Input 1 LLC; Instec; Insuresoft; Insurity; Majesco, Inc.; OneShield, Inc.; Policy Administration Solutions; SpeedBuilder Systems, LLC; and StoneRiver, Inc., a Sapiens Company.
Primary Report Contacts
PAGE COUNT106
14 Novarica Research Quarterly Q3 | 2017
Popular Novarica Blog Posts
Novarica’s senior team blogs actively about new developments in the industry. Some of our most popular blog posts this quarter were:
In addition, our weekly News and Views series, published each Friday, provides exclusive commentary on important news stories. Some of the topics our team has commented on this quarter include:
• Big data, IoT, and AI
• Talent management strategies
• Security regulations and plans
• InsureTech investment trends
• Telematics and the future of driving
• Trends in L/H/A and P/C
Insurer CIOs, Save the Date for
May 2-3, 2018 Providence, RI
The 11th Annual Novarica Insurance Technology
Research Council Meeting
Join us for:
Exclusive presentations of new research
Panel discussions featuring CIOs of leading insurers
Guest speakers from Silicon Valley, Wall Street, and academia
Special Interest Group discussions with peers from your line of business
Attendee quotes:“It gave me the opportunity to hear what others are doing, get some valuable lessons learned, and gave me a second wind to continue to work through the relationship-building process and governance issues. Well done!”
“The quality of the discussion and the thoughtfulness of both the attendees and presenters was high. The length of the meeting was just right. I liked having a chance to talk informally with people at the dinner the night before as well.”
“The Novarica Council event is the only place where the door is shut and CIOs from around the industry speak openly and honestly about how to solve real-world problems.”
Register online at novarica.com/council-meeting
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 us to keep their names confidential, a partial client roster includes Amica, GenRe, Penn Mutual, ProSight, SECURA, SunLife, and XL Catlin.
Our senior team has direct experience as senior IT executives at firms including AIG, Arbella, AXA, Guardian, Liberty Mutual, MassMutual, Marsh, Progressive, Prudential, 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 e-mail 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 knowledge bank, extensive relationships, personal experience, and proven methodologies. Our clients get rapid, actionable insights and guidance delivered directly by our senior team.
© 2017, Novarica, Inc. All rights reserved.
linkedin.com/company/novarica
@novarica
175 Federal Street, Suite 510Boston, MA [email protected]
soundcloud.com/novaricast
