IASA 86TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

The Configurable System and the Customer Experience

Session Number 474

Our Moderator

Conrad Garvey

Conrad Garvey is the Vice President of Sales for ISCS.

Mr. Garvey brings ISCS more than 30 years' experience

in the insurance industry. Conrad brings a deep

knowledge of the complete insurance cycle and rich

insight into insurance company, MGA, and agent needs.

Prior to joining ISCS, he most recently held a policy

administration system sales and sales management

position for a major software vendor.

Conrad’s experience also includes sales of large systems

and agency management software at Applied Systems

and AMS; management and application software sales at

IVANS; and owner of Comand Industries, a personal

lines comparative rating software company.

Today’s session

Our panelists will discuss the configurable system and the

customer experience from a number of perspectives: that of

an industry analyst, a software vendor, and companies in the

process of making use of a configurable system to meet and

exceed their customers’ expectations.

5

Source: Strategy Meets Action 2014

Our Speakers

Deb Smallwood

Deb Smallwood is the Founder of Strategy Meets Action, a strategic advisory services firm offering research, advice, and consulting for insurers and solution providers in the insurance industry.

When Deb launched SMA in 2007, her goal was to help insurers make wise technology investments. Today, that goal has been expanded to help the industry realize the real power of innovation and transformation with all wise technology investments. Deb helps insurers re-think re-energize and realign their business strategies to the IT strategy and plans for competitive advantage. Her specialty is agent carrier connectivity and underwriting automation.

She is highly respected and acknowledged as a leader in the insurance industry for strategic thinking, thought provoking research, and consulting skills. Deb has worked in the insurance industry her entire career in various senior roles such as Chief Transformation Officer at Insurance Company of the West, Partner at KPMG LLP, and Head of application development or Commercial Lines at Liberty Mutual.

Deb is also a frequent key–note speaker at major industry events, and is also a recognized contributor to the major insurance and technology publications and media outlets.

Sal Abano

Salvatore (Sal) V. Abano is the Chief of Strategy and Client Services at MajescoMastek. In his role, Sal is responsible for leading the strategic initiatives for future growth and mentoring the delivery teams on client engagements. Prior to joining MajescoMastek, Abano most recently held the position of Senior Vice President and CIO with Tower Group International.

Sal has been named one of Insurance & Technology’s Elite 8 in 2012 which each year recognizes outstanding senior insurance carrier technology executives. In addition to his Tower Group experience, Abano has also held management and executive information technology positions at QBE the Americas, Kemper Insurance Companies, Munich Re America (formerly American Reinsurance Insurance Company), AT&T Credit, and American International Group.

Sal has a distinguished military service spanning more than 25 years from serving in the United States Marine Corps Reserve and United States Army Reserve Component. His impressive military record includes the role of Field Grade Officer and Chief Technology Officer, Military and Technology Operations, for Operation Iraqi Freedom III. Among his many awards and recognition for his military service, Abano was awarded the Bronze Star.

Paul Deter

Paul joined the Maryland Automobile Insurance Fund (MAIF) as Director of Fiscal in November 2012 and assumed Director of IT responsibilities as of January 1, 2014.

Prior to joining MAIF, he held various IT, Operations, and Financial positions, including Controller, Chief Operating Officer, and Chief Financial Officer with a variety Property and Casualty Insurance carriers and has over thirty-years of experience in the industry.

He received his Bachelor of Administration Degree and Masters of Business Administration from Georgia State University in Accounting and International Finance, respectively. He also holds AIAF and CPA designations.

German Mendoza

German Mendoza is the Senior Vice President of IT at

ProAg Management. German is responsible for every

department under IT from Help Desk, infrastructure, and

software development.

German has been in the crop insurance industry since

1998 and has held various positions in IT beginning as a

Software Developer with Rural Community Insurance

Services/Wells Fargo.

Deb Smallwood

Rethink the Possibilities of the Next-Gen Insurer

Source: Strategy Meets Action 2014

SMA Top 10 Imperatives for Insurers – 2014

Source: Strategy Meets Action 2014

Customer Experience Innovation –Strategic Considerations

Unique aspects of the

insurance industry

Product-centric to

customer-centric

transformation

Increasing importance

of product innovation

Continuing role of

human intermediaries

The paper to digital

transformation

Moving to a unified

digital communications

platform

Extensive activity in BI

and analytics for more

customer insights

Differentiating role of

innovation and next-gen

technologies

1

876

54

32

Source: Strategy Meets Action 2014

Input to the Cycle

External

• Regulatory

Rate/Rule changes

• MGA/Agent/Broker

• Competition trends

Internal

• Marketing

• New product

ideation

Product

Creation

Product

Configuration

Product

Impact

Analysis

Holistic View of Product Development Connectivity

Product Development Life Cycle

Source: Strategy Meets Action 2014

Time to Market is Significant

Average Implementation Time = 7.7 Months

2%

14%

12%31%

24%

17%

<30 days

31-60 days

61-120 days

4-6 months

6 months – 1 year

>1 year

*relationships illustrative Source: SMA Research, Product Development, n=157

Linking Customer Experience & Product Configuration Benefits

17

Source: Strategy Meets Action 2014

Sal Abano

Who is the “Customer” in Customer Centricity?Answering the long time question in the industry

Policyholder

Customer Consumer

How can carriers serve both Customer Centricity AND

Consumer Centricity?

CustomerCustomer

Agent

Policy Holder

Why is Customer Centricity suddenly the buzz word?

The Retail Revolution across Industries

Rising expectations from the

Insurance Industry

Shorten time from POS to policy

issue

One-view of all transactions

Real time servicing

Faster claims Settlement

Agent

Tracking new business

Single view of all policy holder

activities and updates

Accurate and up-to-date

compensation

Real time updates on all company

information

Usability & Gamification

Social Networking

Big Data & Analytics

Technology Changes

Smart Devices

Economic Balance

Demographic Changes

Regulatory Changes

Market Changes

Digital Consumers

Travel RetailBanking Mobile & ISP

How Core Systems Impact Customer Centricity

Legacy State

o VSAM, COBOL, Still some Assembler

o Hard to maintain and few with the institutional

knowledge to do so

o Long user learning curves

o Minimal flexibility

o One or few product lines per system

o Manual workarounds to deal with system

shortfalls

o Dependency on IT for product and process

change

o IT is on the critical path and often perceived as

the bottleneck

Required State

Modern, SOA based open architecture

Intuitive UI with flexibility for product and process

change

BI “on-the-fly”

Business and product rules engine to increase speed

and flexibility

Focus on content and configurability

Wide ranging product types and features on one

strategic system

IT as the strategic partner for competitive advantage

Critical value, not critical path

Barriers to Customer Centricity

So what’s stopping carriers from being really customer centric?

Business Technical Risk

Time to market in introducing

new initiatives, products and

lines of business

Inflexibility in reengineering

business to make data from

customers seamless

Disparate data silos make

analytics difficult

Mesh-up of different systems

with little knowledge of their

interdependencies

Slow approach to modern

market approaches like social

and mobility limit potential for

technical solutions

Manual work around and

inability of legacy systems to

consolidate views perpetuate

policy centricity

Changing how

customers/agents and

consumers touch the carrier

needs to be done well on day

one

Early adoption of the new

interaction modes still

generating best practices that

are not fully understood

High level of data generation

is outpacing ability to

understand what the data is or

could be telling us

Consider short product and

workflow prototype sprints to

lock in on value to the

customer & consumer

Create customer and

consumer centric business

processes and philosophy to

unlock the value of new

technology

Use modern, configurable

systems to make data more

accessible at a party level and

more distributable

Develop an integrated,

modern technical architecture

built on the customer centric

vision

Get mobile now and explore

social in the way carriers

matured their internet

strategies

Eliminate workarounds and

don’t settle for inadequacies of

legacy systems to meet this

need

Phased approaches with

target agents and consumers

to learn what they like rather

that an ivory tower big bang

User groups and prototypes in

addition to looking outside the

industry for best practices on

customer centric processes

Develop a Big Data strategy

and make the customer centric

transformation with the data

value in mind

Business Risk

How can this be addressed?

Technical

Path to Customer Centricity

In Summary: The traits that create the backbone for a real customer centric organization

Not just customer-centric bells and whistles but an

enterprise and technical strategy that is geared for

customer centricity

Systems that enable better customer service through

a customer centric architecture to move off the policy

centric past

Mine the data for a customer driven business and

move to meet what the data is telling you

Paul Deter

Configurable System and the Customer Experience

Integration

• Customer and Producer/Agent Portals (Point of Sale)

• Underwriting System

• Billing System (Accounts Receivables)

Interactive

• Multiple stakeholders (internal and external)

• Insureds, Producers/Agents, Banks, Premium Finance

• Customer centric call center

• Mobile App

Strategy and Tactical Approaches

How can we change our business model…archaic workflows?!!

How can we improve our infrastructure costs?

Data conversion

• “Big Bang” or Run-off

Interfaces (i.e. Claims, Accounting)

Quality Assurance and User-Acceptance Testing

Producer, Premium Finance, and Company Roll-out and Training

User and Management sign-off

Reconciliations

Analytics

• Data Warehouse

• Business Intelligence (BI) Tool

Re-evaluate and Adjust!

Configuration

Business Rules and Controls

Premiums and Rating

Commissions

Due-date vs. Equity Cancellation

Banking

Billing and Collections

Outputs

• Invoicing, Statement, Letters, Notices

Reporting

• Canned vs. Ad-hoc

German Mendoza

Configurable System and the Customer Experience

Crop Insurance Industry

• Customer experience is the biggest differentiator

• Service

• Software

• Internal and external customers

• Independent crop insurance agents are main targets

• Targeting Producers/Growers is a growing initiative

• Mobile technology

• A new wave (generation) of Producers/Growers that embrace technology

Achieving Competitive Advantage

Continue to refine processes and workflows so customer’s needs and desires

are met

Supplemental software for an enriched customer experience

• Set of tools for agents that help with sales and marketing

• Quoting

• GIS/Mapping

• Set of tools for producers that helps with farm management and policy

servicing

• Mobile access to policy information

• BI Reporting

Delivering Results

Business roadmaps drive the IT projects

Internal SDLC process using a mixture of consultants and full time employees

Partnered with MajescoMastek to offload maintenance and support of existing

applications

• Continue to deliver enhancements to existing products using a combination of

onshore/offshore

• No degradation in quality

• Ability to scale the number of resources and projects

• Lower overall costs of maintenance and support

• Ability to continue forging ahead on new technology

IASA 86TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

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