While two different insurers may approach an IT project in their own unique way, there are certain elements that frame the “best practice” approach of a typical model carrier. As Boston-based analyst and consulting firm Celent puts it: “it’s not what you do, but how you do it.”
In presenting its annual Celent Model Carrier awards in New York yesterday, the firm’s senior analysts presented a united front by describing its program as one in which insurers involve stakeholders from the executive, IT and end-user communities, all of whom bring something to the table from which the industry at large can learn.
“Although solution providers play a key role in a carrier’s ability to be successful, this is not a model vendor award,” Craig Weber, VP of Celent’s insurance practice, told the audience. “It’s recognition of carrier IT best practices, and their associated measurable business results.”
A variety of carriers across all lines of business were recognized under a total of 13 award categories, including a single Model Carrier of the Year, were distributed (for a complete list of award winners, see INN’s January 29 online coverage).
“Model carrier components are those things that generally represent the way it should be done,” Weber said, “and components of that best practice are of a theoretical model carrier’s insurance IT systems and practices.”
Celent senior analyst Jeff Goldberg outlined the following framework by which its senior analysts judged the nominations.
IT Best Practices:
Use of industry standards
Optimization of infrastructure
Positioning for future reuse
Automation, STP and system integration
Data transparency and compliance
Improved use of channels
Risk management through proper development, testing and project management
IT/business alignment and project governance
Solicit feedback from end-users
Use of metrics
Measurable Business Results:
Higher productivity, lower staff expenses
Increased revenue or market share
Faster cycle times and more consistent processes
Better decisions, more accurate pricing, reduced losses
Decreased time to market
More efficient document/content distribution
A green organization (new focus this year)
Improved agent/customer satisfaction and adoption
Compliance and reduction of market conduct penalties.
The senior analysts who reviewed the nominations applied that framework to three distinct areas, said Goldberg. “One of the most important things we looked at was the use of industry standards and possibility for their future reuse, such as those business systems standards (ACORD, ISO, IAA) and those technical standards (SOA, XML). Perhaps more importantly, working with industry data standards helps to position a new system for easier integration, whether with systems internal or external to the carrier.”
Another important area is the use of the channel, noted Goldberg. The IT best practices listed in the Celent report focuses on an approach to a project rather than a specific “feature” of a system, which is why, says Goldberg, Celent doesn’t demand that new technology utilize the Web in order to be considered a model carrier component.
“In the old model, different teams serviced each channel,” he said. “The new model has all channels resting on the same foundation. The channel supports switches between the vertical and horizontal.”
A model carrier project that succeeds in this best practice might be an initiative entirely focused on improving a channel, such as (and most commonly) a new producer portal,” added Goldberg. “But it also might e a project in a different area that effectively considers how new functionality will impact existing channels and leverages it appropriately.”
Remarking that this area could possibly deserve a report of its own, Goldberg told the audience that Celent considered risk management, through proper development, testing and project management, as a meaningful measure of model carrier practices. “It’s about issue tracking, requirements gathering and tracking, automated testing, proper interaction with the business side and executive level support.”
A couple of areas not necessarily tied to real, substantial cost savings in the past, are now the focus of model carrier excellence. One example: document management, paperless initiatives. “In the insurance industry, we have already been focused on these practices, but for many reasons,” said Goldberg. “A lot of what we have been doing is now being recognized as being ‘green.’”
As a preview to the actual awards distribution, Goldberg enlightened audience members on the elements behind best practices that have not changed, as well as the year-over-year changes that Celent analysts found during its deliberation process.
“The ways to make an IT project successful don’t change,” he said, “technology does.” In addition, Celent analysts found that in terms of measurable business results, priorities may shift, but end goals remain the same. The application of rules is another area that remains constant, as do partnerships between carriers and vendors. As a result, Goldberg added, “there is amazing IT work being done in the insurance industry,”
Goldberg also identified his team’s findings into the areas currently undergoing the most change. “There is certainly more focus on channel integration, more focus on SOA and Web services that will facilitate building lasting integrated solutions, more mention of green IT, and new business automation projects.
“It’s not just about automation workflows,” he continued, “it’s about having people be part of a workflow that involves technology and human review. It’s understanding the best approach.”
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