Yesterday a friend in the industry asked me about how much of a hot topic billing was, and I had to concede that I wasn't sure. Certainly, I hazarded, there is still an appetite for best-of-breed solutions, even if more often owing to CIOs following a more cautious route.More often than in the past, according to Celent analyst Chad Hersh, insurance CIOs are taking an incremental, component-based, services-oriented architecture approach, and will seek to assemble as many modules as they can from a selected vendor. However, since open architecture permits more choice, they can opt for alternatives if a particular component is found wanting. I would add that given more demanding customer expectations, billing ought to be more than an afterthought.
Whether I was on the right track or not, the question got me thinking about what makes a topic "hot." Without question, necessity is the mother of a good deal of invention and implementation in the insurance technology space. However, that doesn't mean that all systems priorities are correctly ordered: some needs assert themselves with greater force than others. A CIO may have a small number of clear systems priorities and a dozen others that are further down the priority list. It may take more thorough analysis to prioritize these items, and in its absence less rational drivers may come into play.
What I am suggesting is that some items, at some point, are likely to get less attention because they are less interesting or more forbidding. If one had to make a list of more "boring" functionality, billing might be on it.
Lack of flash may not be the only irrational factor in disordering priorities. Fear may drive slow adoption of technological innovation in some areas - actuarial for example.
I have made the case before that actuarial technology was an area in urgent need of technology and process reform, and I've had reason to think so since. For example, yesterday I received a press release from Ernst & Young announcing results of a survey that found a "crisis of confidence towards actuarial and IT" on the part of senior management. While the release was self-serving, it made legitimate points:
"Understanding and explaining results is fundamental for insurers, and it will be increasingly difficult to do so as companies get larger and the reporting requirements grow more complex," explains Steve Goren, leader of the Ernst & Young IAAS Actuarial Transformation practice. "The bar has been raised and actuaries are beginning to recognize the potential role business intelligence can play in their future success."
It's true that, like underwriters, actuaries are reluctant to relinquish any control over their activities, resisting automation. That assertion is amply demonstrated by their dependence on free-floating spreadsheets that can make financial reconciliation a nightmare. But it is probably also true that CIOs are quite happy to leave actuaries to their arcane concerns unless they are commanded by senior management to get involved.It is probably true that CIOs are quite happy to leave actuaries to their arcane concerns unless they are commanded by senior management to get involved.