Insurance IT Innovation: Not An Oxymoron

Further evidence that a growing number of insurance companies are striving to incorporate new IT organizational models, institutionalize innovation, and make smart investments in advanced technologies -- and that these efforts are not at odds with long-standing concentrations on efficiency and productivity -- can be found in the results of this year's Novarica Research Council Impact Awards program. The winners of the second annual Impact Awards, a peer jury-awarded recognition program, were announced this week in New York, were selected by a CIO nominating committee across four categories:

• Great American Insurance Group (practice category) -- for enhancing its IT organization's innovation capability, creating a collaborative workplace, cross-team and paradigm-shifting thought process, and a progressive management process.
• PURE Insurance (Quick Hit category) -- for creation of a pre-fill capability for auto insurance quoting, leveraging third-party data to streamline the application process and improve cross-sell with homeowners. "We are always looking at ways to [extend] ease of use of our systems [and] … to improve effectiveness and ease of use for agents," noted PURE's SVP and CIO, Stuart Tainsky.
• Nevada General Insurance Company (Expansion category) -- for developing a web-based portal for policy quoting, issuance, and endorsements.
• XL Group (Transformation category) -- for development of a global underwriting platform for underwriters to collaborate, access external data, and integrate with policy processing systems. This grew out of "our desire to become more data driven organization," reported Kurt Schulenberg, VP Strategic Development at XL Capital. While also addressing the "retirement of redundant business processes and systems," the carrier also "needed to get to a common system for managing brokers and clients -- a single platform for the buying process," he said. XL has now completed the third release of the new system (complete rollout is set for 2015), and is on its way to meeting a goal of a 40% productivity increase for its underwriters, Schulenberg said.

[CIO Stuart Tainsky Enables Rapid Growth at PURE]

Although the winning insurers were selected based on their achievements in particular categories, there are some common themes across the companies, noted Novarica managing director Matt Josefowicz. These include clear articulation of the expected value of the initiative, consistent executive sponsorship, and a focus on results (rather than on the project), he said. "This is equally true for an infrastructure project or tools [implementation] as for [a project] that builds new capabilities," Josefowicz reported.

Another common success factor across the nominations was "close coordination with vendors, planning for active communications [between insurer and vendors] … and selecting partners for their ability to deliver," not just "cool" capabilities, Josefowicz added.

At Great American, the motivation to bring more collaboration and reduce hierarchy in the IT organization came from a belief that companies must "innovate or die," reported SVP and CIO Piyush Singh. Key to this is eliminating operational silos and the traditional "command-and-control hierarchy," he said. "We're all in this together and the only way to change is if everyone focuses on the customer," he added. "The customer is more important than the company." A business's ability to recognize that and act on it "drives which companies do or don't succeed.

Great American's new model is based on small teams focused on business problems with "no constraints, no boundaries on thinking, and no technology restrictions," Singh said. "It came down to empowerment, ownership and accountability. They had to solve the problem, and they truly could think of better ways to do it."

Noting the success these teams have had in coming up with solutions to business problems within six-week timeframes, Singh observed, "If you empower people and give them ownership, they will do wonders for you."

[Read Piyush Singh's thoughts on Lessons Learned from Teaching the Next Generation of IT Professionals]

Case studies of the winners, nominees, and more than 20 others were published in Novarica's Best Practices Case Study Compendium 2013, a report featuring more than 31 full case studies.

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio