Nov 20188IN MY OPINIONRedefining the Future of IT in InsuranceBy Murali Natarajan, SVP & CIO, West Bend Mutual InsuranceWhat are the secrets to a successful technology operation in the insurance industry?Acquire and retain the right talent, set up a decentralized IT (with proper architectural checks and balances) that promotes speed, innovation and agility, establish clear set of priorities that are funded appropriately and finally, build healthy partnership with key strategic solution providers. The IT department needs to overcome old-school methodologies when it comes to running projects and project management. They have to embrace the new role as innovators and problem solvers for the business. The focus should be on technology-enabled business transformation rather than technology transformation.What should be done by insurers to overcome industry challenges?Most of the insurance companies share a common challenge--weighed down by legacy systems. More than legacy systems, they are weighed down by legacy thought process that needs some escape velocity to break through. For instance, many companies have initiatives like policy administration transformation instead of looking at it as an opportunity for process transformation. In many cases, the policy administration system (PAS) modernization efforts are an inside-out approach. Instead of working on a multi-year full-blown policy administration replacement projects, organizations must take an outside-in approach to identify their customer needs and build capabilities that cater to their needs. Focusing on providing the right set of products to our customers at the right time in a way that is easy for them to use, results in modernizing not only our technology stack but also our legacy way of doing insurance.What are the trends in policy administration?Most of the carriers either already have some modern core system or they are in the process of implementing one. I see a trend where carriers will have the option to purchase and plug capabilities (like ability to rate, or transact) instead of replacing core systems, be it policy, billing or claims. The modern core systems though architected well are marketed and implemented in a monolithic (legacy) way.They are nothing more than new back office systems requiring carriers to build a layer of facade on top of their modern systems to extend capabilities to their customers.What are some of your impactful initiatives?Our two main areas of focus are digital transformation and analytics. With respect to digital transformation, our goal is to rethink the relationship between information, process and people in a digital age. We work towards offering a great digital experience to our customers that is consistent across all of West Bend Mutual. It is not just about launching a newly designed site that works on all devices.We need to think big, but execute small & fastInformation has the potential to alter the rules of the game. We have various initiatives underway to evaluate and experiment ways to leverage modern capabilities related to handling large data sets that would help us with better insight into our product, processes and customers.As always, we will continue to have part of our capacity focusing on transforming our core back office systems. Whether it is moving away from legacy systems or keeping up with new versions of our modern core systems, I foresee this effort for next several years to come.Murali Natarajan
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