Insurers face new and growing challenges as the market moves into recovery in 2011: more delivery channels, demographic shifts, a changing competitive landscape and a rapidly evolving regulatory and compliance environment. Many insurers are faced with meeting this challenges hampered by inflexible legacy applications, underutilized data from internal systems and external sources, and manual spreadsheets and processes. Insurers are looking to Decision Management to balance business optimization, customer services, risk management and profitable growth while leveraging existing IT systems, making straightforward, incremental improvements.
I recently co-hosted a webinar “The Top 10 Imperatives for Insurers and the role of Decision Management in addressing them” with insurance industry expert Deb Smallwood of Strategy Meets Action. In her recently published research – SMA Top 10 Imperatives – Deb identified these top ten critical imperatives for insurers in over 100 hours of interviews with leading executives across the entire insurance ecosystem:
- Put the data to work
- Apply smarts to underwriting
- Rethink legacy
- Fast path new product development
- Drive dynamic distribution channels
- Link customer communication holistically
- Capitalize on intelligence to manage losses
- Benefit from business optimization
- Chart a course to profitable markets
- Make governance work
These imperatives are critical to insurers and highly relevant to other industries as well, so I am kicking off a blog series on how Decision Management and a modern IT architecture address these imperatives.
With Decision Management, decisions are a corporate asset. “Even if your processes look like everyone else’s, making your decisions unique (and better) will ensure customers understand why they should do business with you. Many of your processes remain fairly static over time while the risk assessment, value calculations, policies and regulations that determine the outcomes of decisions within them change all the time.” This is particularly true in Insurance, a very decision-centric industry. For instance, It does not matter how streamlined your claims process is if you decide to pay the wrong claims. It does not matter how efficiently you can issue a policy if you decide on the wrong price given that policy’s risk. Decisions really matter in Insurance.
When decisions are managed as a corporate asset, the results are impressive:
- Faster, easier, independent IT changes
- Coordination of decisions across channels
- Simpler more customer-centric processes
- Higher employee productivity
- An ability to apply analytic insights in every transaction.
Starting next week I am going to publish a series of six posts that address these ten points. My first post in the series will cover Imperative #1, putting the data to work, an imperative central to Decision Management. Putting data to work means leveraging the historical data you have about your operations, performance and policy holders to systematically increase the value of your corporate decision assets. It means going beyond information reporting, dashboards and visualization. Reports and visualizations don’t impact business performance – the decisions a company makes do.
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I’ve been saying “decisions are a corporate asset” and should be treated as such for a long time so it makes me smile when I see someone agree. Many organizations think they are totally unique in their space, but the reality is often they are very similar to their competition. As I think you are pointing out, it’s the decisions they make (from beginning to end) that define the organization — attract or repel customers.
Because I already think of insurance companies as putting data to work (I’m thinking about actuaries and bundling for say P&C products), I eagerly await your insights into where they can be more effective. What actionable information is in the dashboards and reports that should be taken to the next level and automated?