Among the best practices that emerged at a Novarica Insurance Technology 2012 Research Council meeting of 50-plus insurance executives were ways to manage the increased demand to support a Bring Your Own Device (BYOD) policy and turn it to the insurers' advantage.
“One thing that surprised me was the extent to which BYOD (“bring your own device”) has become common in the industry. While managing user-owned devices adds complexity, some members reported savings from supporting fewer corporate-owned smartphones,” said Matthew Josefowicz, partner and managing director at Novarica. Josefowicz founded the council, a knowledge-sharing and peer-networking community made up of 325 CIOs and senior IT executives from more than 275 U.S. insurers.
Another best practice that emerged from the meeting’s discussion was the wide embrace of agile development methodologies by council members.
“Many members reported improvements in the business/IT relationship based on the close working environment that agile development depends on,” Josefowicz told Insurance Networking News.
Research conducted among insurer members of the Novarica Insurance Technology Research Council found that most insurers rate nearly half of their systems below an acceptable level.
“There’s been a tremendous increase in what folks expect from technology. The systems that insurers have had in place to meet user expectation of 10 years or 20 years ago aren’t keeping pace with current business demand,” said Josefowicz. “It’s affecting their ability to adapt quickly so they are reinvesting in developing new capabilities and bringing new systems into the architecture.”
Novarica’s study reported that average IT spending ratios are holding steady between the 2.5 and 5 percent-range with the majority of insurers expecting to increase their IT budgets slightly in 2012 except for large life and annuity insurers.
“That’s no surprise. It’s a tough market for life and annuities with the decline in household assets due to decreasing home values,” Josefowicz said. “It will eventually turn around but in the near term these companies are adapting their systems to support different product types that fit current market needs. They are moving from variable annuities to group space, from variable to fixed annuities and reducing life insurance policy exposure to market risk.”
Along with research, Novarica conducts meetings to enable members to learn from each other while having the choice of remaining anonymous. The research and consulting firm also plans to publish, based on member submissions, a compendium of insurance IT best practice case studies in November 2012.
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