The insurance industry is increasingly using Agile methodology to improve the quality and delivery time of IT projects, according to a new report from Novarica, a research and advisory firm focused on insurance business and technology strategy.

Agile development centers on adaptive, evolutionary development and continuous improvement to help software development teams build and deliver optimal solutions as rapidly as possible. The adoption of Agile has grown by jumps and starts since the insurance industry began using it around eight years ago, according to the study. However, its use is now ubiquitous, even if most larger insurers use Agile only for a small percentage of their IT projects, according to the report, which is based on a survey of 58 insurer CIOs from the Novarica Insurance Technology Research Council.

The survey found that, for most carriers, there is little to no downside to adopting Agile, with positive effects accruing throughout IT, other business units, and even relationships to third parties. More than two-thirds of study participants reported that Agile had improved end-user satisfaction with delivered projects, relationships between business and IT, and IT job satisfaction, the study found. Midsize insurers have adopted Agile more readily than large insurers, but the study found that Agile is not for everything — although most midsize insurers use Agile for more than half of their project work, most large insurers use it for less than a quarter of their projects. Some types of projects, like legacy maintenance, are not great candidates for Agile, according to the study.

Another finding from the study: Agile is not for everyone. It requires cultural change, and for organizations in which business leaders are not willing to make these changes, it will be difficult to achieve any real benefits.

“One of the values that Agile brings to an insurer is that it formalizes regular stakeholder review and

involvement with technology projects, helping to create transparency and build better direct relationships between IT and other business units,” Jeff Goldberg, Novarica VP of research and consulting and author of the report, said in a prepared statement. “Even insurers who choose not to adopt an Agile approach can learn lessons from the methodology about fostering communication, prioritization, and engagement across the enterprise, helping to treat IT as an ongoing strategy asset.”

 

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