Of course Guidewire will not be alone in offering BI/Analytics to its core systems customers. Nearly every major property/casualty software provider offers its own BI/Analytics functionality and/or partners with third-party providers. Cover-All’s 2010 acquisition of Moore Stephens Business Solutions is also an interesting precedent.

Here are three questions to watch: Will Millbrook give Guidewire a competitive edge in vendor selections? Will other core systems vendors begin eyeing the remaining BI/Analytics firms? And what kinds of insurers will want to one-stop shop for core systems and BI/Analytics?

• The future of technology in the workplace
• Engaging suppliers in innovation

The debate was lively with open and frank contribution from all parties.   Unfortunately, as the event was run on a ‘Chatham House Rules’ convention, I am not able to share the details of the debate. (For those of you unfamiliar with British History, Chatham House was one of the UK’s main establishments for military code breaking where all discussions where not shared outside of the house).  So, instead, here’s a quick summary of the main themes:

Topic #1: The future of technology in the workplace

• Enabling new user driven technologies in the workplace is still largely a reactive exercise.  
• However, the extent of tablet computing, BYOD, use of social networking for defined business use, and innovative uses of collaborative technologies is growing (such as tablet based video conferencing, web chat, IM, corporate networking, etc)  - extending beyond the executive suite to front-line staff.
• As the CIO is ultimately responsible for all data and use of IT assets within the firm, security remains a critical concern.  
• The main challenges faced by CIOs are: (1) Educating the business around the risks, (2) Working with suppliers to enable the changes required to open up new workplace technologies (owing to being tied into long-term agreements), and (3) Securing the investment.

Topic #2: Engaging suppliers in innovation

• Overall, insurers recognize that their suppliers are a critical partner in helping them to innovate and welcome their contributions.
• Some insurers have made use of their supplier’s capabilities for innovation (including facilities such as Innovation Labs and bespoke programmes).  Although these facilities were appreciated by insurers, few had found them to be hugely successful in supporting the innovation agenda with the business.
• The main challenge highlighted by CIOs with long-term multi-year outsourcing partners was perceived to be contractual.  Innovation objectives are often negotiated at the procurement stage of a long-term outsourcing contract and focused more on delivering long-term supplier productivity rather than short-term market-facing business goals, which can change from year-to-year and flex with changes in technology requiring an agile response.    
• Furthermore, in global contracts, it was felt that local supplier teams are not always incentivised to innovate with their local client firms.  It was felt that behaviours follow their local incentive plans targeted towards delivery and cost, as opposed to innovation.
• Where insurers have experienced success, it was observed that this was with either smaller suppliers on pilot programmes (where agility, rapid results, close business co-operation and shorter contracts are often exercised), and when local supplier teams have been ring-fenced and embedded into the client teams.

Both of these topics provide a rich seam for future Celent research.  It was clear that these topics feature high on the agenda of many CIOs, where the need to be seen to lead the business around the technology agenda is great.   So, watch this space.

This event is free to attend for Celent clients, flex-plan clients, and the media. Non-clients can attend for a fee of US$250. If you are unsure of your client status, please contact Chuck Smith at +1.617.262.3125 or csmith@celent.com.

Please click here for more information.

Tuesday April 23^rd, Wellesley, Ma. – The Group Experience

Sun Life Financial was kind enough to host this session in their offices and representatives of eight insurance companies focused on the Group and Voluntary Insurance markets joined Karen Monks and I to discuss the changing Employee Benefit space.  We used some concepts from the recent Celent research note “US Group and Voluntary Employee Benefits: Changing Markets, Changing Technology”
to kick off the discussion.

Key points and questions from the discussion included:

• How the Patient Protection and Affordable Care Act (PPACA) disrupts the current distribution/carrier détente, making direct to consumer and alternative distribution a more attractive option
• IS PPACA creating an opportunity for cradle to grave products more strongly aligned to key lifecycle events that require less broker planning/intervention?
• Can exchanges really disrupt the Group/Voluntary market when PPACA is major medical and dental only? A discussion of state sponsored ancillary exchanges and private exchanges ensued.
• Enrollment was a key issue for all the carriers in the room and we discussed where enrollment fits in the sponsor/broker/carrier world, how carriers continue to promote brand through third party enrollment and service providers, and how carriers should architect for enrollment and self -service going forward.

• One of the carriers led a discussion around the specific challenges Group carriers have in handling billing.  While there was an in depth discussion of specific billing issues for the Group market the big issues fell into three major categories:
  • Data Management
  • Lack of standards
  • Convergence of Group and Voluntary products

Karen Monks finished the day with some Celent data from two recent reports,  “2013 North America Insurance CIO Survey: Pressures, Priorities—and Innovation and  “IT Spending in Insurance: A Global Perspective”

Karen highlighted the current state of the life insurance industry across segments and talked about the opportunity in the Group space to create a more interactive, four-season approach to Employee Benefits. Karen then spoke about IT spend in insurance and then dove into the issues CIO are thinking about today and in the future.

As we wrapped the day, the insurers decided we will maintain the “Group of Group Insurers” as a focused segment within our PNE process and will meet again in the fall.  For those insurance carriers that are interested in the Group space, I hope you will join us by reaching out to Chuck Smith csmith@celent.com.

Thursday April 25^rd, Columbus, Oh. – The Innovation Agenda

Nationwide Insurance graciously sponsored the 2^nd Peer Networking Event of the week. Mike Fitzgerald of Celent led the event, where we were joined by representatives of 7 carriers from both life and p&c lines of business. This session was again a little different from the typical Celent Peer Networking Event as we focused on Innovation as a topic and did an abbreviated, public version of Celents Innovation workshop. This workshop helps insurers understand how their current IT project portfolio aligns with their business goals and appetite for innovation, get a sense for the investments they are making by business driver sector and create a common language around innovation for the enterprise.

The insurers took away some new ideas around innovation, a new model for discussing and categorizing initiatives and some new organizational ideas about managing the innovation process. This will be an evolutionary process for most insurers as fostering innovation within a corporation may be the hardest task an executive has before them.

Key points covered were:

•  The need to separate emerging technologies from business innovation: Emerging technologies can be great enablers of insurance business innovation but are not in themselves innovative from an insurance business perspective.
• For best results, differentiate between improvement, innovation and disruption: Most of the people in the session had little problem with differentiating insurance status quo (of which there is a lot) and disruption (of which there is very little). Finding the line between improvement and innovation was much more difficult. The difference is meaningful for insurers to make informed choices about the allocation of their scare resources.
• Using a portfolio discipline can be challenging: We broke into groups and gave the attendees the opportunity to get hands on experience with the Celent Innovation model. There were a variety of experiences. Some found it harder to break projects down by level of innovation; others struggled with categorizing by driver sector.
• An insurer presented their structured model for driving innovation using a centralized innovation-funding model. Their model is an outgrowth of their strategic planning process and is still evolving, with a current focus on ensuring the ideas are captured, managed and evaluated against current business need and opportunity. There was a lot of discussion of sources of potentially innovative ideas and how to ensure top down ‘great ideas for innovation’ from senior management don’t drown out other sources of ideas. There was also discussion about decision-ing lifecycles and the need to never discard an idea out of hand, both to ensure a positive environment for fostering new ideas and because some ideas need to wait for the right climate and business environment to be successful.

Overall the PNE attendees found the exercise useful in helping them find a common language to talk about innovation and avoid some of the common traps one falls into when trying to drive innovation.

We hope you will join us for a PNE event. We are always looking for hosts and again  if you would like to sponsor a Peer Networking event please reach out to Chuck Smith csmith@celent.com.

So what’s our view? We believe that the tipping point around core systems replacement may have been reached. Many insurers now know the direction that they will take (even if they have not yet taken steps to implement it). The strategic questions now being asked are: “How do I get the most value out of my investment?” and, more interestingly, “What comes next?”

I’m excited to announce that our North and Latin American team will be at ACORD LOMA in force to help you answer these questions and to contribute to the debate through sessions on “How Commercial Insurers Can Benefit from Innovations in Personal Insurance,” “Social Media in Business: Friend, Foe, or Who Cares?” and “Emerging Technologies to Die For: A View on Levels of Adoption and Future Opportunities for Life and Annuities.”

We believe this is a great time to explore innovative uses of technology to enable new business models while being careful not to “govern out” innovation from existing investments. So if you’re planning on going to Vegas, please don’t hesitate to come and find us (we’re located at booth #252). We look forward to seeing you there. If you’re not able to attend, then please do pick up the phone to speak to us on these topics; they’re a great discussion to have.

What’s running computers…

In terms of presence of platform Android won. There were a few phones on display but this was a small subset of the total Android estate. There were many tablets including a good proportion from small vendors I hadn’t heard of. There were set top boxes that ran Android and doubled as a media player, a games machine, a social media engine. Finally Android is still making it’s way into cars through the app-enabled in car entertainment systems. In all you could find Android devices in all shapes and sizes. Windows 8 was present and getting some attention but these machines seemed over engineered and almost out of place. Funnily enough, despite it’s absence there were lots of things that hooked up to iOS devices.

Not the Internet of Things, it’s Internet of People…

The Internet of Things or connected devices was a theme at the show but it was eclipsed by another theme – the quantified self movement. Quantified self is the practice of individuals capturing digital data about themselves over time to improve their health, compete with friends and well, because they can. There were devices here for measuring brainwaves, oxygen levels, heart rate, breaths per minute, stress levels, activity levels, body fat, weight and I’m sure other metrics. There must be some data of use here to the life and health insurance industries?

These devices came in all shapes and sizes from bracelets on your wrist, widgets you plug into your iPhone to connected scales but one thing was common – all of these new sensors were mobile first. The devices primarily connected to phones and tablets or the cloud, not desktop or laptop computers.

3D printing in all it’s glory

There were multiple vendors, sizes, types and even different materials on offer. All were printing interesting designs, often downloaded from thingiverse there before our eyes. Prices started from around £850 for a 3D printer designed one or two years ago. My friend suggested that, “Next year you’ll be able to buy these for £30 from any [electrical goods supplier]“. Perhaps a little optimistic but the stands got a great deal of interest as well as sales from what I could see. What has been a geek or “maker” trend is shifting in affordability and accessibility.

3D scanning made an appearance at the Microsoft stand where I witnessed a 3D printer printing something scanned using Kinect style technology.

Finally – TV’s and the new 3D

The Gadget Show followed the trend at CES – 3D TV’s so hyped up in 2012 were dead or absent in 2013. Intriguingly even in the high end gaming areas the conversation simply wasn’t there about the latest 3D TV’s. 4K TV’s were there in abundance and even some novel technology to upscale Blu-ray titles to 4K resolution – the mere presence of which highlights the big deficiency here, there’s no content in 4K and arguably UK bandwidth may not be up to it.

New 3D? Well I was surprised to see a few stands selling modern hologram technology. On asking one of the reps at a stand if holograms were dead since we had 3D TVs he replied, “the test of true 3D is if you can see it with one eye”. There were some very interesting displays of what the technology could do and how it could be used for education and visualisations of data and architectural designs.

So what of all this for insurers?

None of this is relevant to insurance though, right?

A few things stood out for me with potential to disrupt our industry:

• We’re in a mobile first world – desktops and laptops take second place
• The number of sensors and capability of the sensors is increasing
• That means a wealth of structured data in the near future…
• Doctors no longer own measuring our health

This event is free to attend for Celent clients, flex-plan clients, and the media. Non-clients can attend for a fee of US$250. If you are unsure of your client status, please contact Chuck Smith at +1.617.262.3125 or csmith@celent.com.

Please click here for more information.

This event is free to attend for Celent clients, flex-plan clients, and the media. Non-clients can attend for a fee of US$250. If you are unsure of your client status, please contact Chuck Smith at +1.617.262.3125 or csmith@celent.com.

Please click here for more information.

This event is free to attend for Celent clients, flex-plan clients, and the media. Non-clients can attend for a fee of US$250. If you are unsure of your client status, please contact Chuck Smith at +1.617.262.3125 or csmith@celent.com.

Please click here for more information.

When thinking about data this idea of the truth has always bothered me – the idea that system data represents the facts, or the unassailable truth. One of the key activities in establishing classic analytics processes is establishing which data is the truth, there are always arguments about which data is accurate and can be trusted. In this process inaccurate data, or data that doesn’t contribute to this truth is ignored or removed, lost. This leads to a negotiation process and the end result is often called the single version of the truth – i.e. the output of a report that all stakeholders agree to. The strange thing about this process is that it observes that there are multiple viewpoints, but seeks a single truth regardless. Relational database design and modern user interfaces push us to this line of thinking, there is only one field to fill in, one answer to each question after all.

I suggest that there is value in capturing the half-truths, the out-right lies and technology now let’s us analyse these semantically.

It’s easy to come up with examples from the insurance industry where we regularly accept that the data is likely flawed. For instance the original quote data says the vehicle is a standard build but the claims adjuster spots the alloy wheels and rear parking sensors. In the case of an accident in many motor claims the insured makes a statement that there was a crash and the other driver was in error. The other driver also makes a similar statement, saying that there was a crash and the insured was at fault. Most modern systems capture all of this data, the different views over time, the different views from different stakeholders – but still most systems and processes assume that at a given point there is one set of valid data, one driver at fault in the last example.

Now that customers are posting to social media insurers face more questions – what if what an insured stated at time of purchase is contradicted in their Facebook profile? Was that tweet accurate or just posturing on the part of the customer? How should the insurer, or rather the automated systems analysing this data, treat these contrary positions?

There is factual data that is true – the fact that the witness statements were made, the date and time when they were captured, who made them, regarding what case. What of the pertinent data though, the data the humans actually use in determining the case or what should be done next, the data that allows us to reason about the case and to make a judgement? This information is typically stored in free text formats, requiring humans to interpret the data and do what humans do well – establish hypotheses and test them ultimately selecting the one they feel fits best and recording that result as fact. Again, it’s a fact that Bob the claims handler felt on the 1/1/12 that the insured wasn’t at fault – but is that what is recorded? Or is it the assertion that the insured was at fault, recorded as the truth and not a hypothesis – with an audit trail to who updated the system?

If one thing the Big Data movement has taught us, the exploits of Google, Amazon, etc. it is that All Data is Useful. Capture everything!

Why you ask? One example – there exist algorithms and systems that allow analysis of competing hypotheses, capturing of how credible or likely an assertion is based on the believability of the source of the underlying data. What if your system could highlight how plausible the insured’s data or statement is, or a witnesses testimony, or the data from a third party based on the information at hand? What if your core system presented options rather than an answer derived assuming everything in the system is correct?

Truth then is not something best derived from raw data after the fact, but rather something that requires consideration as the data is being collected. Data, knowledge and information collected in the right way will allow future systems to help insurer staff reason about the data and be more effective. The insurance industry is, however, sat on a gold mine of raw data and as the insurance industry starts to mine it’s data, to leverage it for new insights, I suggest insurers will seek new models to better understand the knowledge therein.

Those insurers that will emerge as leaders will capture all the data that they can, will understand that some of that data is contradictory and model it in such a way that software can support decisions about the data rather than leave the grey areas to the human operators.

Capture everything, there is value even in the lies!

What’s your view – is there a single version of the truth in insurance? How are you dealing with contrary data? Have you already solved this?

For those clients interested in Big Data and Semantic Technologies these reports may be of interest:

• Big Data: A Guide to Where You Should Be, Even If You Don’t Know Where You Are
• Big Insurance Data: Drawing Lessons from Amazon, Google, and Facebook
• The Emerging Semantic Web: Ideas for Insurers