In a survey of IASA members conducted by the industry organization and Robert E. Nolan Co., nearly nine out of 10 respondents vouch for the value of IT, but almost 40 percent find the performance of their own IT shops lacking, citing performance as either fair or poor.
Rod Travers, senior vice president of Robert E. Nolan Co., is surprised by the low ratings, since in his view as a management consultant, there are more accepted management practices in place in IT departments and there is more transparency. "Practices are becoming much better on the IT side with companies subscribing to CMM [capability maturity model] practices or project management institute methodology," he says. "In structure or in practice, the IT folks are improving their management practices. That's a positive, because historically IT was viewed as a black box and you never knew what was going on in there."
In keeping the results in perspective, Travers points out those carriers not satisfied with IT often are more willing to speak up than those that have enjoyed good relationships with their technologists. "We still see a chronic disconnect between business and IT, but overall our sense is things are improving, and one of the real ways to advance that improvement is for the business-side folks to step up and engage more proactively with the IT folks," he says. "The business people are the process owners. They are closest to the impact of the results of automation. The process owner is the one who feels the heat when a project is not successful."
Marketing and sales initiatives also took a beating in the survey. Forty-one percent of those responding feel marketing and sales initiatives are among their top failures, and only seven percent view them among their top success stories. "The idea that call centers and service centers aren't more of a priority is a stunner to us," says Travers. "It's really where [carriers] can differentiate."
The best way to connect with an agent is by delivering excellent service, notes Travers. "You can do that with a well-designed service process that includes a top-flight service center. That's a competitive differentiator right there–just servicing agents, not to mention policyholders. That this isn't more of a priority is a surprise, but it's also an opportunity for companies to revisit and recognize the opportunity available in service differentiation."
When asked to identify their top six technology initiatives, respondents listed Web services for agents and customers as their top initiative. "The SOA and Web initiatives will continue to merge into the operating environment," agrees Travers.
Behind Web services, the respondents rated legacy systems replacement or consolidation; new billing and accounts receivable systems; predictive modeling systems; new or improved underwriting systems; and new or improved rating systems.
Not surprisingly, number one on the list of top six business initiatives was to increase sales, new products, and new markets. That was followed by Web services for agents and customers; increased profitability; new billing and accounts receivable systems; enhanced customer service; and replacement of legacy systems.
Wireless technology was not treated kindly in the survey, either. Nearly two-thirds of the respondents do not feel wireless technology is important to the future success of their company. At the same time, 75 percent of the large carriers that took part in the survey indicated wireless is important to their company's future. "It's partly an expense factor, plus [wireless] is still perceived to be a leading-edge technology," says Travers. He believes successful wireless adoption requires some experimentation and some tailoring to a carrier's geographic area, the insureds, and the kinds of products the carrier offers.
"Larger carriers have the benefit of scale and can make the technology worthwhile from a financial standpoint and a practicality standpoint," he says. "They can afford to do the integration and work with [telephone] carriers across the country."
Smaller insurers, on the other hand, are dealing with a smaller scale and unknown territory in terms of the technology. The smaller carriers likely have bigger and more complicated to-do lists, such as claims projects and core infrastructure. "[Wireless] is too far out there for them to be thinking about," says Travers. "It's not a surprise the big folks are paying more attention to [wireless], and in fact, many of them are in their second generation of technology in this arena. As some of this [technology] becomes more commonplace–particularly when it is packaged from a vendor that has worked out all the problems–that's where we'll see more penetration from the smaller insurance carriers."
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