KPIs are crucial to communicating IT value for insurance CIOs
Insurance IT leaders benefit from the use of simple, meaningful metrics to communicate the value of technology investments to business peers. Without a clearly articulated and commonly accepted set of business value metrics for IT, it can be a challenge for carrier IT leaders to create compelling business cases for new investment or receive credit for the value created by their successful projects and initiatives.
It is important to note that value metrics may not be completely under the control of IT. Unlike engineering or performance metrics, value metrics depend on business units’ use of technology to achieve a result. This value is measured in results achieved, not capabilities delivered, so insurer CIOs should operate accordingly.
Insurer CIOs should focus on the speed, efficiency, and effectiveness of key business processes, according to an analysis of over 100 case studies on impactful IT published by Novarica over the past five years. The result of this analysis is a proposed framework of 21 key performance indicators (KPIs), including the six most commonly used business KPIs: average time from submission to quote; average time to market for new product; average time to market for product modification, average time to handle a claim; and underwriting straight-through processing percentage.
Five of these six most common KPIs address accelerating cycle times. It is clear that insurers are feeling the need for speed in the face of changing customer and distributor expectations, as well as a highly competitive market.
Insurer IT leaders should consider simplicity and meaningfulness when designing their IT value metrics to share with executives in other business units. Using these six business KPIs may be a good place to start to help CIOs and IT leaders communicate effectively.
This blog has been reprinted with permission from Novarica.