Although insurance technologists operate in environment replete with operational and budgetary restraints, pondering what could be is not a futile endeavor.
In this vein, a new report from Boston-based
Acknowledging that the answer to the question will vary according to the particulars of an insurer’s business, the report, “Celent Model Insurer Asia 2011: Case Studies of Effective Technology Use in Insurance,” highlights some best practices in the use of technology across various areas of the industry.
One best practice is to adhere to industry data standards such as XML and ACORD. “Using data standards means that an insurer avoids reinventing the wheel and instead manages risk by working with accepted, well-tested, and well-defined models,” Celent Senior Analyst and author Wenli Yuan states in the report. “Even if it requires a little extra work or planning, the reduced risk will save time overall.”
Similarly, Yuan says insurers need to think beyond successful point solutions and create lasting systems that work within a larger, optimized infrastructure. “Model insurers do more than just build or buy modern systems; they also work to rationalize and optimize their existing systems into an ever-modern infrastructure,” she writes.
One way to optimize technology use is to employ a service oriented architecture that positions aging technology components for reuse. “Any system added to the infrastructure will likely be stretched beyond its original intentions, in terms of both functionality and shelf life,” the report states. “It will be easier to achieve these goals by using a service-oriented architecture, industry standards, and easily configurable systems, but a Model Insurer knows the challenge is not just about the technology, but also about the way a system is tested and used by the enterprise.”
To be better able to quantify successful projects, Yaun counsels the use of metrics both before and after a technology project. “It is not enough to measure the time to underwrite new business in a new system if that cannot be compared to the previous toolset. It is difficult or impossible to determine the highest priority IT needs if such self-analysis is not available.”
