“Transformation is inevitable,” said Randy Skinner, VP of insurance consulting at Oracle, in a presentation during Oracle Industry Connect held last week in Boston. “Consumers are now demanding more from insurance carriers and the performance they provide.”
Such transformation comes in many forms, Skinner explained, but the key is for insurers to achieve speed to market as they continue to adopt government regulations. This frequently involves replacement of core systems to accommodate products and regions new to the industry, in addition to consolidation of multiple back-end systems.
The kind of radical change described by Skinner can be seen in the current project at commercial insurer CNA. The company-wide transformation, which will cross all business lines, started four years ago and is expected to continue for at least another four more years.
“[The change] was driven by the need to offer our customers a better product,” explained Lindsay Lovorn, AVP and business lead at CNA, in her presentation. CNA aimed to create an industry-leading product that was easy to understand, modular and tailored to the needs of its customer segments. The insurer also wanted to increase the accuracy and confidence in the base rate for its property and related packaging products, and increase pricing accuracy and consistency.
To improve project scope for all lines of business, CNA targeted business segments including construction, manufacturing, technology, healthcare, finance, professional services and small business. Half a billion dollars was invested into systems, processes and people that would contribute to the transformation’s success.
CNA’s overall transformation will be the final culmination of a series of projects. On its pre-transformation roadmap, primary tasks included renovations to the agency and customer portal apps on its website, underwriting desktop, core policy administration system, claims strategy, and other various business initiatives. From a strategy standpoint, every project had to improve growth, enhance customer experience and demonstrate ROI, Lovorn explained.
Given the multitude of systems within the company, CNA knew this would be a lengthy project and prioritized the organization of projects and employee teams. Management chose to employ a “snail model” for project deployment, meaning that each task is overlapped. This was selected to improve the speed to market flow and reduce IT expenses.
In regards to employee organization, CNA divided its 200 workers into different groups for projects and maintenance so that completed tasks could be edited while new ones began. One large projects-focused team was formed to tackle underwriting, actuarial and vendor assignments. Multiple project management tools are used to keep the project’s many participants in sync.
In order to ensure each project is efficiently completed, Lovorn leads daily 15-minute stand-up meetings with every team, either in person or over the phone. Higher-level management make a big difference in keeping everyone on-task, she said. Each team was instructed to start the day with an explanation for what they planned to accomplish. To ensure effectiveness, CNA conducts two early business reviews (EBRs) and two user acceptance testing (UAT) phases at the end of each project.
Over the course of the transformation, CNA encountered the often-discussed overlap between the IT and business departments. The IT workers often wanted specific instructions, Lovorn said, but the business side could not give specific ideas for exactly what they wanted.
“There’s a wide gap [between the two departments] that we typically fill with IT-business analysts,” she explained. CNA also created a business application group outside of IT that is responsible for developing rates, rules and forms. After the start of the project, the business side owns a lot more than they did before and the IT side owns less. IT has control of the company’s underlying infrastructure, while the business owns the content on top of that infrastructure.
Analysis of business and IT goals ultimately helped develop project strategy and decide which path to take first. “Bridging business and IT is really, really key,” Lovorn emphasized in her closing remarks. It’s critical for businesses to determine how to integrate the two sides in a way that best accomplishes company goals.
Kelly Sheridan is Associate Editor at Dark Reading. She started her career in business tech journalism at Insurance & Technology and most recently reported for InformationWeek, where she covered Microsoft and business IT. Sheridan earned her BA at Villanova University. View Full Bio