Cover All Technologies : Innovation Not Confined to Wow Factor Technology

By Aaron Herrmann

When most people think about innovation or try to conjure up an image that would portray the meaning of the word effectively, the now iconic shot of Steve Jobs holding up Apple's new iPod often comes to mind.  This narrow view relegates innovation to the world of "gee whiz" inventions and cool gadgets, but today insurance companies are finding new ways to innovate in a traditionally slow-moving, rigid industry.

Current talking points in the insurance industry tend to involve sexy topics such as improving the customer experience and designing mobile apps or portals to increase accessibility and self-service options. However, the more impactful conversations happening behind closed doors focus on ways to adapt actual insurance products to the lifestyle choices and needs of the modern consumer. Far from throwing caution to the wind, proactive insurers are cautiously investing in demographic research and analytics tools that will help inform product ideation and development decisions.

Pay-As-You-Go Panic

In general, there is panic among insurers over the proliferation of pay-as-you-go products, even though Progressive, GEICO, Allstate and other large players are initially dominating the choices in this area for consumers.  Will small to mid-size insurers be able to afford to license the technology that would enable the launch of pay-as-you-go insurance products, or is it more economical to develop them from scratch? This is a burning question for many insurance executives that can have additional ramifications even once answered.

It's widely-recognized that many insurance companies still process new business, manage existing policies, and handle renewals through legacy systems that simply won't accommodate the expanded parameters of new types of insurance products.  Billing, for example, becomes a complicated task for an insurer with a legacy system running core administration and moving toward a pay-as-you-go model.  In addition, legacy systems typically lack the robust configuration tools needed for business users to create new insurance products from the ground up.

Concurrent Configuration

Ultimately, insurance product design and deployment is a complex process which demands the coordination of many different teams and technologies. By investing in a core administration system designed with the business user in mind, concurrently with product ideation relevant to younger consumers and a policyholder base that is more mobile overall, insurers can benefit significantly. Core administration systems implemented today without business user configuration capabilities are tomorrow's legacy systems.

Modern configuration tools provide a product configuration environment which makes it easy for business users to quickly define and deploy new insurance products or modify existing products. By bringing business users into the product development process as active participants or drivers, modern configuration tools diminish reliance on expensive IT resources or third-party vendors, simplify the overall product development lifecycle, and enable insurers to focus more on design and prototyping without the complications of system functionality and technical landmines.

Conclusion

Investing in technologies that are not equipped to support the rapid product innovation necessary today does not benefit small and mid-size insurers as they work hard to compete with the larger players in this competitive market. It is critical insurers take proactive steps to require new core administration systems come complete with business user configuration tools upfront in the selection process. Rather than missing the boat on new business opportunities presented by pay-as-you-go insurance products, or other future product models driven by consumer lifestyle choices and demands, small and mid-size insurers should plan ahead to support the product ideation and development process by acquiring core administration systems with robust configuration capabilities.

Insurance product development is where the real innovation is in today's insurance market, but without support from modern configuration tools instead of legacy systems, all the gadgets, bells and whistles in the world won't help.

Aaron Herrmann is senior vice president for Cover-All.  He can be reached for further information or comment via email at aherrmann@cover-all.com.