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!

Friday Jun 24, 2011

Unlocking High Performance with Policy Administration Replacement

It is clear the insurance industry is undergoing significant changes as it consolidates and prepares for growth. The increasing focus on customer centricity, enhanced and speedier product development capabilities, and compliance with regulatory changes has forced companies to rethink well-entrenched policy administration processes.

In previous Oracle Insurance blogs I’ve highlighted industry research pointing to policy administration replacement as a top IT priority for carriers. It is predicted that by 2013, the global IT spend on policy administration alone is likely to be almost 22 percentage of the total insurance IT spend.

To achieve growth, insurers are adopting new pricing models, enhancing distribution reach, and quickly launching new products and services—all of which depend on agile and effective policy administration processes and technologies.

Next month speakers from Oracle Insurance and Capgemini Financial Services will discuss how insurers can competitively drive high performance through policy administration replacement during a free, one-hour webcast hosted by LOMA. Roger Soppe, Oracle senior director, Insurance Strategy, together with Capgemini’s Lars Ernsting, leader, Life & Pensions COE, and Scott Mampre, vice president, Insurance, will be the speakers. Specifically, they’ll be highlighting:

  • How replacing a legacy policy administration system with a modern, flexible platform optimizes IT and operations costs, creates consistent processes and eliminates resource redundancies
  • How selecting the right partner with the best blend of technology, operational, and consulting capabilities, is an important pre-requisite to unlock high performance from policy administration transformation to achieve product, operational, and cost leadership
  • The value of outsourcing closed block operations

We look forward to your participation on Thursday, July 14, 11:00 a.m. ET. Please register now.

Helen Pitts is senior product marketing manager for Oracle Insurance's life and annuities solutions.

Wednesday May 25, 2011

2011 ACORD LOMA Insurance Systems Forum Wrap-Up

Wow, another ACORD LOMA Insurance Systems Forum is now behind us and San Diego proved to be a popular host city for this year’s conference. I believe it has been about 10 years since I last attended the conference in this wonderful sunny location!  The annual event continues to offer an excellent forum to network with insurance industry peers, learn from technology vendors, and hear about current trends from Insurance Analyst Firms.       

This year’s event began on Sunday with numerous Pre-Forum activities and the Opening Vendor Reception that evening and concluded with a great closing party aboard the retired Navy aircraft carrier USS Midway on Tuesday evening.

During the opening General Session on Monday morning, I was entertained listening to Biz Stone, Co-Founder of Twitter.  Biz provided a unique perspective of how Twitter was created and the role of social media in our culture. He also stressed his ideas of creativity, why we needed to be emotionally involved and discussed the triumph of humanity over technology.

I was impressed with the “list of assumptions” he personally asks all new Twitter employees to make including – “We can change the world, build a business and have fun” and “The only deal worth doing is a win-win deal”.  The assumptions were all great ideas that can serve us well in both our personal and business settings.

The program sessions offered on Monday and Tuesday covered a wide range of industry topics.   I focused on attending the Life and Annuity Sessions that provided a wealth of information from industry experts and were focused on several key themes including Data, BI & Analytics, New Business Underwriting & Straight through Processing and core Policy Administration.    

As a Platinum sponsor for this year’s conference, Oracle was very active in this year’s event including our involvement in the ACORD LOMA Solution Provider Advisory Committee.  We also demonstrated our continued support for industry standards during ACORD's first Plug and Play Tooling Jamboree held on Sunday. The Jamboree provided both carrier and vendors the opportunity to test their implementations of ACORD's Life & Annuity Standard and Plug and Play Technology.  

During the conference, Oracle also announced the results of a groundbreaking policy administration benchmark that included a mix of 100 million life & annuity policies and more than 2,000 concurrent users.  The impressive results are the largest known benchmark of its kind in the insurance industry. It included a data set containing five years of financial history, totaling nearly 30 terabytes of data.

I found this year’s event rewarding for both its program content and the ability to extend and renew the many relationships I’ve developed over the past 20+ years in our industry.  I look forward to next year’s ACORD LOMA Forum in Orlando May 15-17, 2012 and participation in next month’s IASA Annual Educational Conference and Business Show June 5-8 in Nashville, TN.    

Roger A.Soppe, CLU, LUTCF, is the Senior Director of Insurance Strategy, Oracle Insurance.

Tuesday May 24, 2011

Fidelity Investments Shares Best Practices for Policy Admin Modernization

Many of the life and annuity insurers I spoke with this week during the ACORD LOMA Insurance Systems Forum shared how they are continuing to face unprecedented pressure to deliver higher levels of customer service, reduce risk, and improve speed to market—and also continue to be constrained by their legacy policy admin systems to meet these challenges. So it was particularly compelling sit in on a presentation Tuesday by Jim Klauer, vice president, client technology for Fidelity Investments Life Insurance Company.

During the case study session, “Clearing a Path to Performance with an Adaptive Systems Approach,” Klauer shared how the insurer is well positioned to address these challenges following its implementation of a modern, adaptive policy admin system. He provided an overview of the business benefits and offered best practices surrounding Fidelity’s modernization project. Klauer noted that the company has significantly reduced its time to market for annuity products since implementing its new policy admin by more than eight months versus its legacy system.  It has also improved its systems integration and reporting capabilities.

He encouraged other insurers considering or preparing to embark on a modernization project to take the time to thoroughly analyze and reengineer its business processes, like death claim processing. Fidelity’s process previously using its legacy system was very manual. Death claims were tracked outside of the recording keeping system, with its actuaries manually calculating payout amounts, in addition to manual administration of shell contract, money transfer, accounting and customer correspondence. In contrast using its new, rules-based system the company has been able to automate these steps reducing errors and the time to process claims—and ultimately provide better services to its customers (in this case the beneficiary/ies) during a very difficult time.  Improved performance in serving customers is key to retention and loyalty.

Speaking of performance Oracle also issued a press release on Tuesday highlighting the extreme performance in a recently completed benchmark test of Oracle Insurance Policy Administration for Life and Annuity Version 9.3 running on Oracle Exadata Database Machine X2-2 and Sun SPARC Enterprise M9000 application servers. The benchmark performance test, conducted in partnership with a customer, is the largest known benchmark of its kind in the insurance industry, including 100 million policies and more than 2,000 concurrent users.

The findings show that the technology combination can enable insurers, even the largest Tier One carriers, to achieve the scalability, system availability and performance needed to meet increasingly rigorous requirements for better customer service and reduced risk. It enables faster batch runs, providing an extended window for system availability to service customers and conduct essential transactions, while reducing server costs and opening up new opportunities for hardware consolidation.

Helen Pitts is senior product marketing manager for Oracle Insurance's life and annuities solutions.

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