Insurance Technology Impact Awards: Core Winner Panel

Insurance Technology Impact Awards: Core Winner PanelCore system technology projects are among the most risky, complex, and expensive efforts insurer IT teams can undertake. The core policy system is at the center of an insurer’s business, so it’s critical to get it right. Examples of successful projects are invaluable as roadmaps to follow.

Aite-Novarica Group’s Insurance Technology Impact Awards exist for just this reason: to create clear summaries of successful insurer technology projects that created real business impact. Each year, CIO members of our Insurance Technology Research Council recognize exemplary projects in the core, digital, data, and IT practice categories.

On Thursday, October 6th, I hosted a panel discussion featuring representatives from this year’s core category winners to learn more about their journeys and how they executed these successful projects. Panelists included Kim McGregor of Ohio National Financial Services, Matt Wilcox of Encova, and Davindar Gill of Tokio Marine Highland. While each project was unique, a few key themes emerged over the course of our conversation:

  1. Legacy system risk isn’t just technological, it’s organizational.

Any CIO managing legacy core technology knows that aging systems pose technological risk via outdated interfaces, cumbersome processes, and security gaps. They also often impose heavy maintenance costs.

These technological risks are interrelated with personnel risks. One form this takes is training: The older your systems are, the harder it is to find people who understand them or are willing to learn how to support them. One panelist was obligated to lure a past employee out of retirement to manage a legacy system during their core transformation process. Another noted that upgrading from a green screen mainframe system to a browser-based core system brought major benefits for training.

  1. Leveraging technology can de-risk dependencies.

Core transformation can also manage key person dependencies in other areas of the company. Tokio Marine Highland implemented a cloud-based flood underwriting engine, in part to de-risk its rating process by codifying the flood expertise that up to then had lived within a handful of expert underwriters. Creating a new underwriting tool institutionalized that knowledge to ensure continuity should those employees move on.

As to the cost of maintaining legacy systems, one panelist shared, “When we finally sunset the legacy systems, we will save over US$10 million per year.”

  1. Unforeseen complications can be opportunities.

Each core technology project faced delays and interruptions. One panelist’s project had a target launch date of June 2020 and needed to pivot to a virtual environment amidst the COVID-19 pandemic. Another panelist’s project faced a lack of knowledge among staff and was delayed in order to bring in some experts and hold trainings. This delay ultimately helped the project team understand the new technology better and provide more accurate requirements to the vendor.

  1. Project methodology and people are critical to success.

Panelists shared their advice for taking on large technology projects. One emphasized the benefit of seizing small wins: “We broke the project down into smaller problems, and as we solved for those smaller things, we gained confidence and trust among the team.” While not every project used Agile, a consistent theme across Impact Awards case studies is that short sprints can help requirements and outcomes stay aligned for complex projects.

Another panelist highlighted the importance of trusting the project team—of “putting the right people in the right places, giving them the authority to make decisions, and trusting them to do what they are good at.” Talent management was a shared challenge on these projects, as many insurers have lost knowledge workers recently.

  1. Changing technology implies changing processes.

One final key theme is that new technology can’t produce impact in a vacuum: It has to be used effectively, so revising processes and ensuring effective change management is critical. One panelist noted, “We challenged the team to come to the table with fresh ways of thinking and new ways of doing things.” Doing things in a new way will take some adjustment, but having an engaged project team and experienced project manager can help manage the change.

These core system project winners were chosen as standouts from among 16 submissions for consideration in the 2022 program. For the full list of 2022 Impact Award winners and links to all four case study compendium reports, please visit Insurance | Aite-Novarica.

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