I recently had the pleasure of leading a Special Interest Group of insurer CIOs in the group life/voluntary benefits space during the 11th annual Novarica Insurance Technology Research Council meeting. We ran through several topics, addressing the issues, thoughts, and trends on the minds of the CIOs, including the following:
Standards Challenges
There was a lively discussion around challenges related to developing and implementing standards for data exchange between players in this ecosystem, spurred on in part by the recently announced partnership between LIMRA and OMG. Despite the expressed desire by carriers to have a set of standards, regulators are not pushing carriers towards adoption, and, paradoxically, many of the efforts that have attempted to create standards over the years (e.g., LIMRA, ACORD, etc.) have failed to recognize some of the key barriers to adoption.
While there could be a benefit to developing a standard and adopting it at an admin or enrollment platform level, as one CIO noted, “you do have to support data in multiple formats … not every client is using an admin or enrollment platform.” Eventually, it comes down to a carrier’s ability to manage data and turn it into consumable information, which doesn’t require specific standards. The problem of data formatting for consumption is very real, but there may now be better ways to resolve the issue(s) than through standards bodies.
Impact of Cloud
As the number of insurers using cloud computing has tripled in the last few years, most carriers are incorporating cloud into their technology architectures, seeing benefits in speed, flexibility, capacity, resiliency, and security. As one CIO said, “for the longest time, [avoiding cloud] was about security concerns. In the last year, it flipped.” There was debate among participants over putting data into the cloud, but many carriers want to move away from on-premise data centers. The crucial thing to remember is that cloud is a journey and will take time, and modernization efforts should consider a cloud-native strategy for new systems and components. For group and VB carriers, one of the acknowledged issues for cloud deployments may not be their own security and data domestication policies but rather those of their clients. Adjusting the language in contracts and approaches to negotiations on the front end may be required to take full advantage of all that cloud-based deployments can offer.
“War for Talent”
The talent management landscape is changing and supporting an IT organization during a time of significant change through finding and retaining the right talent is an ongoing challenge for insurer CIOs. In order to have people with durability, some insurers are recognizing the need to mix people with different experiences and varying tenures. Carriers are also encountering issues with employees who no longer have the requisite expertise and skills needed to support bringing their organizations through transformational or modernization efforts. Getting creative around the talent acquisition and retention issues becomes increasingly important, particularly given the looming retirement bubble, which may impact very specific skill areas.
For example, some organizations have found that an untapped pool of potential developers for older technologies that remain mission-critical may be hiding in plain sight in their business operations areas; through demonstrating good aptitude, success has been enjoyed in transitioning people into new career paths, thus generating a new form of reciprocal relationship between carrier and employee. A key issue for these carriers is that the work needed to support these lines of business continues to morph and adjust, and the supporting talent pool is critical for future success.
One CIO summed up frustrations on the topic: “As long as you have work consistent with where you want to hit strategy-wise, I don’t have sympathy for anyone at any age who doesn’t want to better themselves.” Continuous learning turns out to be something that has real applicability well beyond startup companies and Silicon Valley; carriers need to adjust how they manage the talent in their own IT organizations, which may require changes in existing policies and practices under the control of local Human Resources organizations.
For more information on trends in the group life/benefits space, see our recent report on Business and Technology Trends: Group Life/Annuity/Voluntary Benefits. To learn more about our research and advisory work with group insurers, contact us at [email protected].
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