By Ara C. Trembly
When I first migrated to the insurance industry from the technology industry some eight years ago, I was astounded at the antiquated level of technology being employed in insurance.
What amazed me was how far behind the technology curve the insurance industry seemed to be. Insurersonce among the pioneers of computing as mainframe userswere still slogging away on those same systems over 20 years later, and they had no intention of changing that situation.
On one level, that is understandable. We are a risk-averse industry, and new developmentsparticularly new technology developmentsare fraught with hazards. Being in the vanguard may mean you get the latest technology products first, but it is also likely to mean that you will have to work out many bugs the vendor either didnt anticipate or didnt find.
Its common knowledge in the technology field that one simply doesnt buy Version 1.0 of anything, especially software. Its also common knowledge that in the insurance industry, we dont fix something until it is brokenand has been broken for quite some time.
Thus, IT professionals in our industry are subject to at least these two restraining forces when they think about modernizing their enterprises with new platforms and/or software. I dont envy the challenge these folks face. Its a little bit like being appointed the new products evangelist at a buggy whip company.
A couple of years ago, I hosted a round table at IBMs Global Insurance Executive Conference that focused on why carriers dont trust technology vendors. The most frequent answer from the carriersin one form or anotherwas that they felt the vendors had often not taken the time to get to know the insurance business overall, and/or the companys business in particular.
Yet, there are many technology vendors in the insurance space with something valuable to offer, if only carriers, producers and third-party firms will take the time to listen. These vendors have been listening to their potential customers and are developing products that meet bottom-line needs for streamlining and automating processes in order to boost efficiency and enable greater volume in processing.
Of course, I dont mean to characterize all vendors as hard-working market researchers with good products. To be sure, there are some technology vendors selling vaporware (products that sound good, but dont actually exist), while others are hoping desperately to jam a square peg into a round hole by offering products that have worked in other industries, but are untested or poorly suited for insurance.
And there are some vendors who will put a new interface and nice packaging on an old product and re-introduce it as the latest greatest version of that product.
Still, I would say most vendors selling technology in the insurance space are committed to delivering value to the industry. Those who try to skate by on the methods mentioned above are quickly spotted by insurance buyers, who, although they may be slow to act, are often quite savvy. As a recent country-western song said it: I was born in the dark, but it wasnt last night.
So what am I saying? Simply put, dont let the legacy of phlegmatic technology adoption in our industry hold you back from seeking solutions that will actually help your bottom line. Hold vendors feet to the fire, make them test their wares on your systems and guarantee performance, but dont send them packing just because what you have is good enough.
Ara C. Trembly is senior technology editor and tech columnist for the property-casualty and life-health editions of National Underwriter. He can be reached at atrembly@nuco.com.
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