Tag Archives: chief information officer

Checklist for Improving Consumer Experience

Chief information officers (CIOs) are responsible for decisions and implementations that promise to deliver on enterprise goals. A CIO’s job is not only to invest in projects that are going to improve and streamline a company’s internal processes but to keep an eye out for initiatives and capabilities that will keep them ahead of industry shifts — shifts that can potentially challenge the company’s core business. Increasingly, improving customer engagement to promote loyalty and drive growth is becoming important to most insurers.

Understanding the scope of the process, where to begin and how to monitor progress remains problematic, so here’s a quick checklist of things CIOs can focus on today to start improving the consumer experience:

Start from the customer’s perspective —

  • Know who your customers are comparing you against:

Keep in mind (and remind your colleagues, whether they are in senior management or in the mail room) that consumers are not comparing you solely with other insurance companies. They are also comparing you with the other places they do business — and that includes online businesses (Amazon, for example).

  • Understand what their expectations are.

Here is a reality check: No consumer will be thrilled to fax a wet-signed renewal application. Although there are good historical and legacy system justifications for demanding it, this is no longer acceptable for today’s consumers, who rightly demand immediacy.

  • Meet them where they are… or will be.

Online is outdated; mobile is the new norm. You need to be thinking about how even mobile devices will be replaced by something newer and greater. In an age where cars can drive themselves and televisions are ”smart,” how much harder do you think it will be to sell insurance?

See also: Tips on Improving the Customer Experience

Follow up by looking at things from your employees’ point of view.

  • What skills do your product development and marketing teams possess?

They most likely know a whole lot about insurance — its concepts, how to make it work from a business perspective and even how to present it to customers. Chances are, however, they are not versed in software engineering and technical concepts or tools.

  • What tools are employees familiar with and which do they use in their daily work?  

Can tools like Word, spreadsheets, email and interactive shared drives or repositories be leveraged?

  • How much IT engineering goes into translating a product vision into actual products (forms and online/offline interactions, whether direct or through agents and brokers)?

If you are like most carriers, once an insurance offering has been defined on the business side (product, marketing, claims, legal), IT steps in. How much time and money do you spend recreating what was already done in Microsoft Office? Would it not be more efficient if the subject matter experts were able to handle more of the load on their own?

See also: Keen Insights on Customer Experience

Take it all in from a systems and processes perspective.

  • What core systems do you have in place today?

It is a safe bet that you have many systems in place, many of which overlap or are similar in features and purpose.

  • When — and how — are you going to consolidate, upgrade or replace those systems?

Realistically, this will take time. A long time. Probably too long to afford waiting for it to be done.

  • Look for plug-and-play capabilities and opportunities for an enhanced experience that do not force you to throw away all of your investments.

At the end of the day, you have a lot of smart people in your organization. Listen to what your customers are telling you, empower your people by removing extraneous and overly technical steps and look for ways to enhance your company’s communication capabilities without having to start everything over from scratch.

Who's Next? CIO Succession Planning

With apologies to Pete Townsend and the Who, the name of one of their iconic albums seems a fitting place to start when it comes to an important question for a CIO: Who’s next?

That question is not a small matter, given the ubiquitous importance of technology in the insurance industry, so it’s all the more curious that most organizations and CIOs give short shrift to succession planning for this critical position. 

In my time as a CIO, I was more concerned about hanging onto the job myself, and the last thing I wanted to do was groom a successor and give my boss any good options for replacing me. However, once I learned to stop looking over my shoulder and to focus on the best interests of the organization, I could think in terms of my own career mortality.

It probably helped that my tenure was during the era of the human capital planning frenzy. That phase turned out to be an insidiously clever way for consulting firms to make big bucks by delivering long-term plans that kept insurance carrier human resources departments busy but drove everybody else crazy with assessments and ratings. But the frenzy did manage to obligate organizations to think about succession planning in a more holistic and enterprise-level manner. On balance this was a good thing, although it did include the painful process of ruthlessly rating the future potential of people and focusing the resources of the organization on the chosen ones. 

As it turns out, the one position that most organizations struggled with as they thought about succession planning was the CIO position. That was true of my own experience. 

There are several reasons for this.    

First, unlike other executive positions, the precise definition of what a CIO does is still a moving target. Yes, the CIO is responsible for overall technology strategy, execution, budget, etc., but that’s not all of it. In today’s rapidly changing technology landscape, many CIOs are expected to be the technology prognosticators, somehow magically peering into their crystal balls to predict the technology future. On the other end of that spectrum, many CIOs are still viewed as the chief “techie” guy, the one everybody looks toward when somebody’s presentation isn’t working at the board meeting. 

The truth, of course, is somewhere in the middle of those two extremes.

Second, like many other executive-level positions, CIOs are more often than not extremely time-constrained and don’t make the time to focus on developing the next levels of IT leadership.  Most CIOs juggle many balls, and, even if they are blessed with a talented team of lieutenants, it’s difficult to carve out the team to focus on the kinds of leadership development that lead to succession planning. 

It may also be that the next level of IT leadership is extremely strong technically but do not have the innate characteristics and skills required to become a CIO. That’s a common Catch-22 for CIOs – the need for high-quality technical expertise at the next level of leadership can almost exclude the kinds of raw executive skill sets that might one day lead to the CIO’s office.       

Third, more borne from self-preservation than anything else, the CIO position has not historically been the most stable of executive positions. One need only look at the average tenures of CIOs compared with other executive positions to understand why some CIOs may be a little reluctant to purposefully groom their replacement. 

After all, once that hand-picked replacement is ready, doesn’t that make the boss expendable? 

CIO succession planning still lags as compared with other executive positions across the industry: The question is, what can be done about the problem? 

First and foremost, the CIO, whether he is on firm organizational footing or just hanging by a thread, must take a professional approach to succession planning that, done well, benefits the company. 

Besides, CIOS owe their direct reports the developmental exercises and opportunities that go with succession planning, because many may aspire to become a CIO one day. 

Finally, CIOs owe it to themselves. For CIOs who aspire to excellence in their role, and who may even aspire to another corner office in the company, succession planning is one of the many things that simply go with the territory.

Reflecting back on my own experiences, I can honestly admit that I had some trepidation about succession planning. It wasn’t something that came naturally, and it did seem to acknowledge some sort of built-in obsolescence – kind of like when the new purchase warranty ran out on something. 

However, I did come to understand the importance of planning, and it provided me the opportunity to work with some very talented IT people who aspired to higher leadership levels. 

I was the one who gained a lot from that, and the benefits are still with me today.

Global Insurance IT Spending Set to Top $100 Billion

As conditions in insurance markets worldwide slowly improve, CIOs are beginning to re-assess their strategies to drive a new set of IT priorities and are increasing their IT budgets.

The new reality of only modest premium growth in most mature markets is driving focus on simultaneously improving operational efficiency and organizational flexibility. As a result, Ovum is seeing the re-emergence of IT projects focused on legacy system consolidation/transformation and replacement.

Within emerging insurance markets, expanding core platforms and infrastructure to support growth in these regions remains the priority.

Consumers' demands for “anywhere, anytime” interaction continue to drive significant IT investment in digital channels across all regional markets.

These findings come from the latest Ovum Insurance Technology Spend Forecasts, available on the Ovum Knowledge Center. These interactive models provide a highly detailed breakdown of IT spending through 2017, segmented by geography, insurance type, insurance business function, and IT category.

The sharp decline in new business growth across all life insurance markets following the global slowdown led most insurers to rapidly and significantly cut their IT budgets. However, accelerating year-on-year growth in 2013, following some cautious expansion from 2011, confirms that life insurers are now moving from a cost-cutting mindset toward reinvestment in strategic IT projects. Ovum expects this growth in IT budgets to continue at a 7.6% compounded annual growth rate (CAGR) between 2013 and 2017 to reach a global value of just over $49 billion.

IT spending across global non-life insurance markets varies less and has generally lower growth rates. However, Ovum expects IT spending by non-life insurers to grow at a 5.7% CAGR overall to reach $60 billion in 2017. IT spending in the most mature regional markets of North America and Europe will continue to remain significantly greater (at least twice the size) than the faster-growing Asia-Pacific region beyond 2017.

As insurers emerge from short-term cost-cutting, CIOs are beginning to prioritize projects that drive customer acquisition and retention or improve operational effectiveness – ideally both. All insurers should at least be re-assessing their current IT approach to ensure sufficient focus is given to revenue-growth initiatives, to prevent becoming stuck in a “maintenance only” IT strategy.

Within the European markets, intensive competition and prolonged slow premium growth is driving a focus on customer retention, with online portal projects being key IT initiaitives for many life insurers. These initiatives are a critical means of driving process efficiency, reducing operational costs, and responding to the demands of policy-holders for self-service functionality. As the requirements of Solvency II recede and the imperative to deliver sustainable reduction in operational costs becomes increasingly urgent, European life insurers are also refocusing on the issue of legacy system modernization. Legacy systems are not a new concern, but market conditions are now forcing insurers to address the problem. As a result, Ovum expects to see continued expansion of IT budgets in support of consolidation/transformation and core system replacement projects, to reach annual spending of nearly $5 billion by 2017.

A key priority driving IT spending by North American life insurers is the need to comply with emerging regulation such as the National Association of Insurance Commissioners (NAIC) Solvency Modernization Initiative (SMI). The impact of regulatory compliance on IT budgets will continue to be felt up to 2017, driving spending on enterprise risk management (ERM) and enhanced management information systems (MIS) in particular. Ovum forecasts a 9.7% CAGR in this area.

The Asia-Pacific region will see the most significant growth at an 11.6% CAGR to reach annual IT spending nearing $15 billion by 2017, overtaking the European market to become the second-largest regional market. This expansion is being driven by life insurers needing to “build out” core systems and infrastructure to capture the strong growth opportunities in the region.

The goal of increasing new revenue through greater customer interaction is a critical objective for non-life insurers in both the North American and Asia-Pacific markets. Although North American non-life insurers are already well advanced in terms of online channel deployment and functionality, Ovum expects budgets directly related to digital channels to grow at a 9.0% CAGR, with mobile and social media emerging as the key focus of channel-related IT projects. Among Asia-Pacific non-life insurers, Ovum expects advanced functionality (such as policy application, quotation, payments, claim tracking, etc.) served via digital channels to see rapid development in the next 24 months.

European insurers in general are less advanced in the implementation of digital channels than their North American counterparts, although there is significant variation between individual players. However, Ovum expects this gap to rapidly diminish as the deployment of online portals and mobile channels emerges as a key priority from 2013 onward. IT spending in support of digital channels will grow at a 7.4% CAGR to 2017, with much of this growth occurring early on.