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Redefining the Future of IT in Insurance

By Murali Natarajan, SVP & CIO, West Bend Mutual Insurance

Murali Natarajan, SVP & CIO, West Bend Mutual Insurance

What 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 & fast

Information 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.

How different is insurance industry compared to other sectors?

I believe most industries have their own challenges when it comes to digital transformation. Some have done a good job of building products focusing on their customer first. I believe that insurance industry is behind from that standpoint. Often, we focus on the products we believe, have a market for and then figure out how to sell them to our customers. The insurance industry needs to "Think like a customer, act like a startup." That is the message I consistently try to drive to my team.

What are some of your strategies to steer the company forward?

To begin with, there is no such thing as an IT project. If you are working on a technology project, there should be a business value to do it. We need to think big but execute fast and small. Often we think big and execute big ending up taking several years to accomplish something. By that time, the technology has changed, the business demands have changed, and we end up losing the pulse of reality. That's the core cult I'm trying to drive.

How to identify right partnerships?

Obviously we cannot do it all on our own. We need to partner on two fronts.

First, a partner that has the capability to make your vision into reality: I focus on the cultural alignment of a vendor/service provider and their ability to execute, before working with them to build a healthy partnership. I look for partnership that is willing to help us with few critical things that help us achieve 80 percent of our strategic objectives, not those who try to boil the ocean. I look for partners that effectively help me dump my technical debt and build technology wealth to the organization, not help me by holding on to our past.

Second, partners that will help us with our explorer strategy: I look for thought leadership, where our partners help us with identifying macrotrends in technology that could potentially disrupt our way of doing things today. Given the activity level in the industry and the number of start-ups, it is always challenging to identify the right partner to achieve this. I focus on creating an environment that is nimble to capitalize on opportunities that we come across.

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