Celent names Model Insurers

Seven years. Isn’t that when some people get an itch? Not Celent’s 7th annual Model Insurer awards program. We are excited that this year our Model Insurer program saw a large number of highly competitive submissions. Our Innovation & Insight Day, where the winners were announced, was combined with our Model Bank awards and had record attendance. Celent’s online competition preceding the event asked “How would you define innovation in six words or less?” After evaluating the 150 entries, the winning submission was “Human generated evolution.” How appropriate I thought given the emphasis placed on technology today to make the insurance industry better? This year’s 17 Model Insurers and Model Insurer of Year implemented technology projects that not only helped some evolve in the industry, but also expand markets, distribution channels, and develop new products. This year’s winning technology projects differed a bit from last year’s in that last year several emerging technology began to infiltrate the IT department project plans. This year, some of the same emerging technology was apparent, but after so many years of constrained budgets insurers were also looking at how to use technology to improve efficiency and save costs over time. I am not saying the submissions veered away from innovation completely, but whereas last year we saw the industry taking a large step forward in market and product agility and improving customer experiences with more innovative technology, this year the step forward was smaller in those directions. Instead more insurers concentrated on efficiency and expense control and liability management through claims and billing projects or data analytics. However, I consider some of the steps made in these directions to be just as compelling because for many insurers they are using the constraints put upon them and still had impressive project successes. Some examples include:

• Allstate Financial which was spurred by the need to adhere to a new regulation and opted to go beyond meeting the regulations and implement a new secure credit card processing system with reengineered and automated credit card payment processing, recurring payments, refunds, and accounting processes. They also eliminated any chance of security breaches related to customer credit card numbers.
• Hiscox USA changed on their competitors in the small business market from competitor to partner. Hiscox decided to leverage SeaPass' technology by building a link between the BOLT Platform and the Hiscox direct website so that prospects coming to the BOLT website or service center could quote and bind coverage on Hiscox products in real time. The new partnership was an innovative shift which now benefits both Hiscox and SeaPass.
• Industrial Alliance implemented an auto insurance product that relies upon telematics data to determine pricing. The insurer offers incentives to 16-24 year old drivers to improve and maintain responsible driving behavior. This innovative product allows a relatively smaller Canadian insurer to successfully address a niche market that previously did not exist, and was typically avoided by traditional underwriters.
• XL Group pls, Celent’s Model Insurer of the Year, implemented a truly global claims system that standardized the claim process for every product that XL Insurance sells and in every country in which XL Insurance operates. The three year project involved replacing multiple legacy systems that were the result of the many acquisitions XL made over the years. They also implemented a multichannel online system where customers can report and monitor claims and enable mobile activity. The deployment of XL GlobalClaim and XL GlobalClaim Customer Portal resulted in operating efficiencies and consistent processes for all lines of business in all of its 27 business groups; completely paperless claims files; integration with Third Party Administrators; and a reduction in the claims reserves required by the insurer. The project came in under budget and on time.

I see insurers continuing to make steps towards improving their operations and believe that they will ultimately embrace the idea of using technology to innovate the way they do business. History has shown that humans have used tools to make their lives better and technological innovations to leap frog how things were always done. The industrial revolution is a great example from the turn of the 20^th century of how years of doing the same thing resulted in humans finding a way to do it better. At the turn of the 21^st century, iTunes and mobile technology proved that business, market, or life changing innovations no longer take hundreds of years or even decades to come to fruition. As insurers embrace innovation, it’s only a matter of time that our next Model Insurer submissions will show insurers taking larger steps or even leap frogging the competition because they allowed humans to use technology to dictate a course of innovation at their companies.