celent’s 2015/sessions... · 2020. 7. 29. · senior business architect – innovation group...

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Maximize Greenfield Project Value: Leveraging People, Core Systems and Analytics

Session #571


Karlyn Carnahan Research Director – Celent’s Insurance

Karlyn is a Research Director in Celent’s insurance practice.

She is a widely recognized expert in the industry who has

been extensively published in a broad range of industry

media and general business media. She has presented at

numerous industry events including ACORD, IASA, ACE,

and PCIAA.

Karlyn’s consulting experience includes numerous systems selection projects

across policy admin, billing, claims, loss control, CRM, and other core systems.

She has also completed multiple IT organizational assessments, primary market

research of insurance agents for carriers, marketing and product roadmap

strategies for multiple software vendors and other strategic projects for carriers.

She holds an MBA from Stanford Business School and a Certified Property

Casualty Underwriter (CPCU) designation.

Karlyn can be reached at [email protected]

mailto:[email protected]


Doug Cretsinger Sr. VP of Business Transformation & CIO – GuideOne

Doug is the Senior Vice President of Business Transformation

and CIO at GuideOne Insurance. Doug oversees the enterprise

project management office (EPMO), process improvement and

lean operation efforts, as well as strategic and operational

planning.

He graduated from Drake University with a BS in Business

Administration and an MBA degree. He joined GuideOne in

2012 but worked for the company previously from 1982 to 2000

and held various positions, including Assistant Vice President of

IT, Director of Marketing and Training, and Regional Claims

Manager.

Doug holds a Project Management Professional (PMP) certification from the

Project Management Institute and is certified in Strategy and Portfolio

Management from Stanford University.

Doug can be reached at [email protected]



Jasmeet Gill Principal – Deloitte Consulting LLP

Jasmeet is a senior leader within Deloitte’s global insurance

practice, based out of Chicago. He is recognized for driving global,

complex, high-impact, technology-enabled, strategic initiatives at

some of the largest insurance organizations in the world. His area

of focus is around core insurance systems, specifically around

claims transformation, policy administration transformation, billing

transformation, and analytics. He has extensive international

experience, having served his insurance clients around the globe in

the Americas, Europe and Asia-Pacific.

Jasmeet has a proven track record of successfully partnering with business and IT to

deliver end-to-end technology advisory to implementation services. He has deep

experience with business alignment, business value, technology investment decisions,

business process design, technology planning, and technology development and

support.

Jasmeet can be reached at [email protected]



Ben Moreland Senior Business Architect – Innovation Group

Benjamin Moreland is a Senior Business Architect at Innovation

Group. He has over 15 years of experience in the insurance

industry and 30 years of experience in IT.

Prior to joining Innovation Group, he worked for Celent, an

insurance analyst firm, focusing on Data Mastery, BPM, Portal,

rules, SOA and policy administration solutions. While at Celent,

he wrote a vendor spectrum report on data mastery in Insurance

and jointly authored two Big Data reports.

Before working at Celent, he was Director of Enterprise Architecture, responsible for

all the data, SOA, BPM, rules and portal architects The Hartford Insurance Group.

Ben’s primary responsibility is to help drive business value into the Insurer Suite

solution and assist customers to better understand the business value of Insurer

Analytics.

Ben can be reached at [email protected]



Maximize Greenfield Project Value: Leveraging People, Core Systems and Analytics

Session #571


About Celent

Global business and IT strategy research

• Digital and Omni-Channel

• Innovation and Emerging Technologies

• Legacy and Ecosystem Transformation

• Data Mastery and Analytics

• Operational Excellence

Ongoing advisory services

Vertically-oriented consulting

Staffed by industry experts - 13 FTEs devoted to insurance

with additional coverage by analysts in other practice areas

A division of Oliver Wyman - global financial services

consultancy with 1,400 consultants, offices in 40 countries

9 9 © CELENT

The Business Environment Continues to be Challenging

High levels of competition

Expenses continue to rise

Customer expectations rising

Margins squeezed

Low interest rates

Low growth

Weak loyalty


A Demand For Growth Is Fueling IT Plans And Budgets In 2015

• Growth continues to be

the number one issue

driving IT investments

followed by efficiencies

• It’s more important that

carriers do it “better” than

“cheap”

• Increasingly regulatory

requirements are also

driving investments

• Diversification made the

charts with over 20%

saying this is a significant

reason to invest

0% 20% 40% 60% 80% 100%

Innovation

Diversification

Competitive Parity

Cost Reduction

Regulatory Reqs

Efficiency

Growth

Impact on IT Plans for 2015 (n=39)

Significant Moderate Small None


How do I

grow the book?

How do I

reduce

expenses?

There Are Only Four Ways to Drive Growth

Manage the Product

• New products

• Cross sell additional products

• Align pricing to risk quality and

gain more margin

• Build capacity to process more


Manage the Product

• New products



gain more margin


Manage the Channel

• New agents

• New territories

• Manage agents better

• New channels


Manage the Product

• New products



gain more margin


Manage the Channel

• New agents

• New territories


• New channels

Manage the Brand

• Strengthen the brand

• Improve competitive

positioning


Manage the Product

• New products



gain more margin


Manage the Channel

• New agents

• New territories


• New channels

Manage the Brand

• Strengthen the brand

• Improve competitive

positioning

Acquisition

• Acquire a book of business

• Acquire a company


While Carriers Are Focusing On A Number Of

These Growth Initiatives, It Isn’t Easy To

Actually Deploy.

Increasingly carriers have challenges launching new

products quickly, entering new territories, attracting new

markets and adding new channels.

Why?

• Complexities of older legacy systems mean long launch times

• In the middle of an existing core system replacement and don’t want

to divert efforts

• Hesitancy to invest in large scale system changes when it’s not clear

how successful the initiative will be. Easier to take a temporary step

that can be canceled if necessary.

• Adding additional work to start something new to already overloaded

staff often means the new initiative gets short shrift.

• Sometimes, it’s just plain easier to start new - Greenfield


What Do We Mean When We Say “Greenfield”?

Any of the below

• Launching a new product/line of business

• Entering a new territory

• Deploying a new channel

• Entering new markets

Essentially - starting fresh


There Are A Variety Of Ways Carriers Start Fresh

A variety of techniques

• Create a start up unit within the carrier.

• Pull staff off existing projects to focus on the new initiative

• Utilize out of the box fully integrated insurance company in a box –

often in the cloud

• Take advantage of an already planned core system replacement by

starting with a new product, new state, or new market


Carriers Have To Balance The Risk Factors And Plan For A Variety Of Challenges.

Can create significant challenges.

• Redeploying staff from existing business to a zero revenue producing new

opportunity (at least day one)

• Lots of parts have to come together - not just the technology but the

distribution channel, branding, and regulatory issues.

• Risky - a large investment may yield suboptimal results

• Lack of information can keep a carrier moving down the wrong path

• Lack of agility can make it hard to change plans if assumptions are wrong

• There may be a lack of knowledge in the organization of the new product, line

of business or market

It can fail

• May need to plan in advance for a quick exit

• Think through brand implications in the event….


There Are Some Critical Success Factors To

Reduce The Risk And Give A Carrier A Better

Chance Of Succeeding

Success factors include:

• Fast deployment

• Ease of exit

• Clear metrics to monitor progress

• Flexibility and agility to rapidly modify products, processes, business

rules and prices

• Ability to gain insights and respond quickly

• Rely on the expertise of partners where possible


Business Transformation Case Study – GuideOne Insurance

A $650M DWP P&C Niche Carrier

“Insuring the people and organizations in the ministry,

non-profit, education and care communities”


GuideOne Transformation Journey

Go Live 2013 2014 2015

Claims Work Comp June AMD/Prop Feb

Casualty Mar

Enhancements

Personal Lines

Policy, Portal,

Billing, Analytics

1 State Auto Sept 9 state auto roll-out

Home and

Umbrella

Development

Commercial

Lines Policy

4 State Work

Comp Oct

CPP + Crime,

Inland Marine

Development

Key Strategy #1 – Reduce risk and maximize business value by implementing

single line of business first, conquer majority of integration issues, then roll out

remaining products and states in a fast follow

Key Strategy #2 – Greenfield for personal lines to grow business quickly

and put conversion on back end at renewal


Commercial Business Case

Premium Lift Generates $21M

profit in 10 years

Today, church quote

turnaround is two weeks.

Tomorrow agents will be able

to quote approximately 50%

SAME DAY, in their office

without home office

intervention

Today, online quoting is

available only in 34 states and

church only. Tomorrow, ALL

states, ALL lines

Quote Today



Today agents must print all

documents, then scan and send

via email. Inefficient!

Today’s quotes, policies and

endorsements are extremely

outdated in look/feel.

Policies are produced in an

indexed PDF format making it

easy for policyholders, agents,

and adjusters to find the specific

section of the policy they are

looking for.

Quote Tomorrow



Business Division Savings From Process Improvement

Functional improvements from system are:

• straight through processing

• automated underwriting

• moving entry to agent office

• reduction of duplicate entry (4 systems to 1)

Results in:

• 100% touch to 50% touch on submissions

• Reduction of 25 FTEs and an avoidance of another 36 FTEs = a

$45M savings over 10 years

• $1.6M annual save ramping to $7M annually



Loss Ratio Improvement

Improved data analytic capabilities

will lower loss ratios, saving $30M in

10 years

Programming the underwriting rules

into the system provides increased

consistency in the application of the

rules = improved management of

our risks and loss ratios

Improved data mining enables

expanded use of predictive

modeling in new lines, improving

risk selection and pricing

Better reporting desired by A.M.

Best and our reinsurers


Personal Lines Business Case

Organic and Acquisition Growth/Profit

Ability to provide new functionality to

capture affinity business and get a

piece of this $35 billion market

segment

Immediate issue, underwriting and

print – none of which is provided today

Flexible billing options asked for by

customers and offered by competitors,

not available today aiding customer

retention

Life Stages Product Suite – not

possible today

Billing today

Legacy transaction history is coded and does not provide any

additional details. Also, the Customer Service Team must manually

calculate the impact of an endorsement on the

Legacy system.



Profit Restoration on Current

Book as we move legacy

business to PL 2.0 >$6.5M

Improved product flexibility (e.g.

ACV coverage, restricted

coverage forms, reduced

premium leakage)

Speed to market (e.g. rapid rate

changes)

Underwriting rules are automated

Better matching of risk to price

Superior data analytics to track

profitability

Billing Tomorrow

The new system provides a simplified view of transaction

history.



Business Productivity

Automated processing

• Home: 100% touch to 10% touch

• Auto: 40% touch to 5% touch

20 FTE reduction saving >$8M

over 10 years

Training for CSRs – from 6 mos. to

a few days

Training for billing – from 4 mos. to

a week

The Legacy system requires 2

policies and multiple screens to accommodate 4+ vehicles in one household. This often results in 2 different effective dates and

duplicate fees.

5 vehicles? Problem!



Ease of Doing Business

Data Prefill (e.g. pulls registration

data)

Simplified data entry for agents

Accurate data entry on quotes

and amendments

Data verification in real time

1/3 of endorsements done online

by agents

Clear English descriptions of

transactions

5 vehicles? No Problem!

The Customer Service Team is able to view all of a

policyholder’s vehicles at once. This is a simple process

compared to Legacy.


What do our agents think?

PL PAS video

Difference from agent perspective


Realizing value from core systems transformation

Jasmeet Gill

Principal, Deloitte Consulting LLP


Potential challenges with value realization in core systems transformation

Core systems transformations can offer tremendous value, but also

present several challenges to realizing business value


Value realization blueprinting using a business case

A business case, when done effectively, can serve as a blueprint for

your core systems transformation delivery and value realization

Building a realistic business case 1

Working the business case into program delivery and

governance

2

Refining business case to enhance value realization 3


Building a realistic business case: Stakeholder alignment

Building a realistic business case should begin with alignment between

key stakeholders on the business strategy and its enabling technology

Alignment between business strategy and enabling technology

Stakeholder alignment and sustained commitment

Core systems transformation is generally considered an investment for the future

Critical to have alignment between stakeholders on future business strategy and its

enabling technology

Equally critical is alignment between key business and IT stakeholders on the drivers

for and key capabilities desired from the core systems transformation

Given the typical complexity and risk from these transformations, stakeholder

commitment to the change is important throughout the transformation effort


Building a realistic business case: Controllable business benefits

Benefits captured for a realistic business case should be based on

measures that can be operationally owned and controlled

% of Policies

Lapsed

% Inc.in

Annualized

premium

Shareholder Value

Revenue Growth

Combined

Ratio

Expectations Asset Efficiency Operating Margin

Volume

Improve Customer Interaction

Efficiency

% Change in

Billing

Call Volume

Avg. Handling Time / Call

(min)

Customer Satisfaction

Index

Retain & Grow Current

Customers

Less errors in

billing process

Straight-through Claims

processing

Customer Satisfaction

Index

# follow-ups

for premium

reminder

Acquisition and Maintenance Costs


Building a realistic business case: Capturing costs

All internal and external resource, hardware and software costs should

be captured with due consideration to scope and the ‘cone of certainty’

Discovery

Requirements

Design

Cone of Estimation Certainty

50%

30%

10% Accuracy % of Estimates

Internal and external resource costs

Operational run costs for the new technology stack

Software licensing and maintenance costs, and infrastructure costs

Key cost components


Working the business case into program delivery and governance

Once approved, the business case can be a mechanism to help guide

program delivery towards achieving benefits within cost parameters

Adherence to functional and technical guard rails

Making governance everyone’s responsibility

Managing program functional scope and promoting out-of-the-box conformance

Avoiding customization to help achieve easier upgradability

Providing a vision and framework through which the project team can self-govern

Recognition of the impact of decisions on business benefit realization and/or program

costs


Refining business case to enhance value realization

The business case is considered a living document that can help guide

course corrections during program delivery to enhance value realization

Monitoring benefits over time and making course corrections

Refining business case during the program lifecycle

Value monitoring during program delivery can provide an early view into actual vs.

planned benefits realization

Course corrections can be made to help mitigate the impact of wrong assumptions

and to realize business objectives

Business case should be refined through a governance process as additional details

that can impact benefits and costs become known


Questions & Answer

Session


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celent’s 2015/sessions... · 2020. 7. 29. · senior business architect – innovation group...

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