Thursday May 17, 2012

It's a Wrap at ACORD LOMA 2012

In our discussions with customers, Oracle Insurance has noticed an increasing number of multi-year transformational projects. Insurance companies are recognizing that their existing IT systems have become so complicated, they’re actually holding insurers back, instead of helping them to move forward. This was reflected in our 2011 industry survey, where nearly two-thirds of insurers said they could provide better customer service if they had better IT.

During yesterday’s Platinum session at ACORD LOMA, Oracle’s Srini Venkat and Roger Soppe focused on the business drivers behind these transformational projects. They gave a number of real-world examples of insurance companies who are undertaking real-world transformations. They noted that one size does not fit all: transformation can take many different paths. Some examples they discussed:

Focus on business rules. Srini Venkat noted that in this approach, the goal is often to extract, consolidate and simplify the huge numbers of business rules that insurers have. These rules may govern everything from rating and underwriting to policy processing. He gave the example of one insurer who wanted to be able to support growth over the next 10 years. When the company looked at replacing and consolidating its multiple policy administration systems, it discovered that the number of rules would overwhelm a new core system. Instead, the insurer decided to focus on product configuration and rating, with a phased approach to policy admin replacements. It’s looking at a number of new tools to manage its business rules, 40% of which are related to rating and underwriting. In this approach, volume and complexity were the insurer’s key considerations in transforming its business.

Consolidate rating. For many P&C insurers, rating engines are where product information lives. Insurers often have multiple rating engines tied to policy administration systems, web portals, or other systems. This leads to inconsistent pricing, compliance issues, and the inability to develop innovative products. In addition, rating engines that are locked into policy admin systems are often inflexible and lack the ability to scale.

Consolidating onto a single, rules-driven rating engine can help alleviate these issues. Srini Venkat gave examples of three different insurers who have taken this route. The benefits have included accurate pricing, an increase in the number of new business quotes, more automation, faster product development, and improved ease of doing business for agents and customers.

Replace core systems. For life and annuity carriers, speed to market is often the key business driver. Insurance is a first-mover business, and those who can be first to market with a popular product often come out the winners. In addition, life insurers often lack customer self-service capabilities, they want to create products that agents and brokers want to sell, and they are saddled with the high costs of maintaining multiple, legacy policy administration systems.

Roger Soppe discussed several customers who chose to replace their aging policy administration systems with a modern, rules-driven one. The results they achieved included faster speed to market, better-selling products and increased revenue.

Modernize distribution. The final transformation approach discussed during this session focused on modernizing distribution. Many carriers struggle with the high cost of distributing their product portfolios to diverse channels, and agents often find it difficult to do business with multiple carriers. Roger Soppe shared the story of one life insurance direct marketer who chose to use a data exchange service. This gave them a central hub which they could use as a single source of data for the multiple carriers who use the service. By using a single, aggregated feed, the marketer lowered its IT costs and found it easier to do business with a multitude of carriers.

The presentation was well received by the Twitter-sphere, with attendees tweeting that they enjoyed the story-telling approach. 

Today featured a presentation from Oracle customer CNA Insurance. AVP Lindsay Fassett shared details of the company’s approach to transformation, a five-year project with the ultimate goal of delivering superior service to customers and agents for CNA’s highly profitable commercial lines. While there are five separate pillars to the project, Fassett’s team is focused on the “speed to market” piece, which includes product configuration, rating and document production. The company selected Oracle Insurance Insbridge Rating and Underwriting as its rating engine, and Oracle Documaker for the production of forms. Fassett shared that the business side of the house, including actuaries and underwriters, are very much involved in IT selection, and they selected Oracle Insurance Insbridge because the application would be easy for them to use to create and manage rates.

The conference wrapped up this evening with a Cuban-style party hosted by ACORD LOMA. It was a fun and successful event, and we look forward to doing it all again next year!

Tuesday May 15, 2012

Flying High at ACORD LOMA 2012

ACORD LOMA 2012 kicked off today in Orlando. While the official welcome doesn't happen until this evening, there were a few "pre-conference workshops" today that provided educational content for early arrivers. One of these was Oracle's session entitled "Flying High: How the Cloud Can Make Insurance Firms More Successful." While there is lots of information out there on cloud, it was nice to get some specific information about why the cloud matters to insurance.

Mary Pilecki, who came to Oracle from the RightNow acquisition, opened the session with an overview of how consumer expectations are changing, driven by their experiences with banks, communications providers, and even social media. Consumers want to be able to research insurance offerings, shop online, compare rates, and get recommendations from other customers before they make the decision to buy. Yet many insurers still struggle to provide a consistent level of online self-service. The cloud enables this by acting as a central place for data, providing the same information to consumers whether they are purcashing online, via a call center, through a mobile app, or from a broker.

Another way in which the cloud can help insurance companies is through scalability. Rather than operating a large call center, which is expensive in terms of real estate and equipment, insurance companies can use the cloud to let customer service agents work from home. This allows the insurer to save on infrastructure costs, and makes the company an employer of choice. In addition, it can help the insurer ramp up service quickly during a catastrophe. Agents can get online easily from home, allowing the insurer to add more staff to handle the higher volume of calls. Even if the insurer's head office is in the middle of the disaster zone, the cloud infrastructure is often located elsewhere—meaning the company can keep serving its customers.

Oracle's David Krauss then outlined Oracle's strategy for the cloud, which includes offering customers a choice of cloud arrangements: private, public, or hybrid clouds. He also discussed security concerns, which are always top of mind for insurers. One of the advantages of Oracle's approach is that it embeds security into every level of its cloud offerings: hardware, database, middleware and applications. Learn more about Oracle's cloud strategy and how it can help insurance companies in this video. 

Wednesday's sessions include a presentation from Oracle VP Srini Venkat and Senior Director Roger Soppe. Please join us in Panzacola H1-2 at 3:30 PM, as they discuss strategies and options around business transformation for insurance. And don't forget to drop by Booth #711 to pick up your red wristband for our Wednesday night customer celebration, poolside with live DJ. See you then!

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Oracle's flexible solutions can help insurers navigate the change necessary to meet today’s challenges and have the business agility to be prepared for the future.

For mor information, visit oracle.com/insurance.

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