Thursday, September 16, 2010

Looking for program manager

Just a brief note that we are looking for a program manager in the development team, should anyone be interested...


Tuesday, September 7, 2010

The value of integrated solutions

If you are part of the TIA community you probably know about our solution and the fact that it is an integrated solution for property and casualty insurers.
In many ways the TIA Solution resembles a variety of other standard solutions used for running businesses. Examples could be the SAP Business Suite, Microsoft Dynamics, Oracle E-Business suite, Siebel, JD Edwards etc. etc. Although these solutions are not meant for a P&C insurer they share the characteristics of an integrated solution with TIA.
The notion of one integrated standard solution used to manage core parts of an entire business has evolved during the 1990’es and really matured and expanded during the 2000’s. Especially for companies within manufacturing and distribution these solutions have become de-facto standards as opposed to bespoke solutions or knitting together multiple best-of-breed systems.
This trend has during the 2000’s also emerged in the insurance space with the TIA Solution as one of the front-runners - for many good reasons. As I see it the integrated, standard solution has a number of advantages over loosely coupled best-of-breed components.

  • Predictable release cycle allowing longer term planning
  • System and integration tested “out-of-the-box”
  • Common user experience
  • Single technology platform
  • Single set of business rules and logic
Predictable release cycles
With an integrated solution like TIA, customers should expect a predictable release cycle from the vendor looking at least 18-24 months ahead. This enables predictable planning within the customers business and IT staff and is a pre-requisite for reaping the benefits of an upgrade path. Customer can harvest the true value of a standard solution, being lower TCO and speed of delivery of new business capabilities, technology enhancements and features in general.

System and integration tested “out-of-the-box”
As opposed to a loosely-coupled, best- of-breed component approach, the integrated solution will deliver high quality across the board, being thoroughly integration and system tested with each release. This reduces the effort significantly at the customer side, lowering the cost of gaining new capabilities in the business. By implementing multiple components from multiple vendors no single entity (besides the customer) has the responsibility for ensuring everything works. I expect this to be the primary reason for the growing success for all integrated standard solutions. Bearing the cost for making sure that everything works requires a significant effort. For the vendor of a standard solution this again requires a significant customer base to fund the quality measures necessary to put in place. Today the TIA Solution has a customer base of more than 50 insurance companies spread across more than 31 countries. This kind of coverage is simply necessary in order to sustain a high quality of deliverables of a standard solution.

Common user experience
The value of users only having to familiarize themselves with single user interface should not be underestimated.
Having one place to find customer information, policy information or claims information with a common user experience is attractive to most users. The ability to move from one or the other part of an application within a familiar user experience lowers the cost and increases the efficiency drastically. The training of users is simplified and the general quality of the data and execution of business processes will be higher than relying on several different user experiences.

Single technology platform
The aspect of technology platform becomes especially interesting when “customizable” standard solutions are in focus. For quite a lot of companies where a standard solution is the choice, the solution may however only meet part of their requirements. Typically what we see is the 90% of our customers’ requirements are met by the solution, but what about the rest? This is where configuration and customization comes into play subsequently the technology platform. By having one integrated solution you will have one technology platform underneath to adopt. In the TIA Solution case that would be the Oracle Fusion stack with the underlying Oracle database.
Imaging having several best of breed solutions/components – each one with it’s own technology stack with it’s own data model, business process language, rules, user experience and release cycle. It can quite fast become quite messy.
By adopting a standard integrated solution much of that complexity is left to the vendor of the solution (like TIA) and resolved once and for all for all customers running the solution. A good example of this is the adoption of new Oracle technologies within the TIA Solution (Oracle 11G Database and middleware releases) or the prebuilt standard interface from TIA to SAS Institute. Developing and testing that everything works is a fairly complex task, which would be cost prohibitive for insurers individually.

Single set of business rules and logic
Avoiding duplication of code is a well-known design goal which helps reduce the maintenance and upgrade cost in the long run. Knowing that data is updated correctly and that business rules are the same no matter what is essential. Consider an example; whether a quote is entered through a user interface or inserted through a web service call , there should only be one set of business logic executed, ensuring correct update of the database. This again also simplifies any customizations required. There is simply only one place to customize the behavior of the logic.

In general it is my opinion that the advantages of a standard solution far outweighs any drawback there could be. Only in very few cases would a unique bespoke system be the choice. This could for instance be in a situation where there is absolutely no “repeatability” identified (“once in a lifetime” examples – like a rocket launch..) or if the usage of the solution is so narrow that there is no one else in the world doing the same. Apart from these examples – where customers are willing to pay an exorbitant amount of money for a unique solution - I would say that a standard solution is preferred.

Then of course the trick is to pick the right one!

Wednesday, September 1, 2010

Future trends and the insurance industry

Yesterday I travelled to Genève to partipate in the "Insurance Vision Day" arranged by the standards organizations of ACORD and UN/CEFACT in conjunction. The day was focused on discussing future global trends and the effect on the insurance industry and the role standardization could play in this.

The day was kicked off by futurist David Smith who gave his insight into some of the future trends and how he saw the possible effect on insurance. Later, Jürgen Heck, Program Director, Europe for ACORD gave his perspective from an insurance point of view.

Actually this was a headline identified by the breakout group I participated in. The headline covers several unique trends all pointing to the fact that customers are becoming much more informed and is going to demand services (seemingly) tailored to them. The web 2.0 savvy customer do not only require 24-7 service at the fingertips, but is likely to expect insurance companies to cater for exactly his/her needs and offer products and services matching this. Obviously this will require much more than a corporate web site, and even possibly include offering outside normal insurance products. On my way home in the plane I happened to read about an actual example from Sweden, where the bank Nordea now is offering their young customers free music download besides their normal banking products. Much like TDC in Denmark is bundling music download as an integral part of a broadband mobile or ADSL subscription. For sure the new insurance customers must be met where they are being Facebook or other similar social networks. Apple already has some success selling insurance for their devices on Facebook. Perhaps we will soon see the first social network of people to organize their own “self-insurance”, perhaps all they need is someone to administrate and underwrite it… food for thought.

The aspect of catering to the customers need was not on the top of the list for ACORD members when asked by ACORD what the most important issues they were facing were. In fact, many other issues were brought which to me indicated a more internal view on things. Issues such as increasing sales, reducing costs, talent attraction and more were considered important. I personally believe the #1 issue for insurers should have been providing the best customer/user experience on the market. Simplicity when interacting with customers is the key to success. This requires the right products, the right communication, the best service and the right underlying technology to manage it all. The interesting thing is that the Insurance industry is one of few industries which have absolutely no physical goods as part of the business model. Everything can be digital, which in my mind shows a huge potential for improvement but also exposes a general lack of invention in the industry or willingness to exploit these opportunities.

The Islamic community
In a not so distant future (I forgot the actual year) it is predicted that as much as 25% of the European population will be muslim. This will for sure have an impact on the products and services delivered and those which can be acclaimed to be Halal (allowed according to the Islamic laws). Within insurance the ability to deliver takaful insurance (complying to the islamic rules for how to offer insurance) is a yet unrealized opportunity. This is obviously on top of the rest of the islamic population throughout the rest of the world. Just today in the radio I learned that a French burger chain has tremendous success opening new burger restaurants offering burgers strictly based on Halal meat…unfortunately for insurers this is not “merely” about defining a new product, but will impact the entire operation of the insurer and require a solution to match those demands (e.g TIA).

So what role does standards play in all of this? Well, for sure the future will bring much more electronic interaction - the ability to transact without paper requires lots and lots of standards for those transactions. The promise of standards will also bring lower costs to insurers, especially if those standards are implemented once and for all in standard solutions such as the TIA solution. In my opinion the road is however long and winding, since agreeing on standards across Europe – not to mention the entire globe – is a complicated matter. I would welcome few simple initiatives (standards) to kick it off, for instance – why don’t we have one common scheme for car manufactures to publish car make/model information…

At TIA we have a dedicated team worrying about local and global standards, implementing these whenever required. An example is the upcoming European standard for payment transactions (SEPA) which we are currently looking into (in it’s various local flavors).

All in all a good day where some interesting discussions took place, however without any clear conclusion or direction. The future of the insurance industry has yet to materialize