You’d be forgiven if you thought business intelligence (BI) — along with its two close pals, data and analytics — were chief preoccupations for insurance companies. You’d be forgiven because, according to one study we’ve seen, between 2015 and 2020, somewhere in the neighborhood of 80 to 90 percent of property/casualty insurers considered BI and data analytics to be strategic initiatives. And you’d also be forgiven because Information Age published this:

Data analysis is one of the historical pillars of insurance. Actuaries have used mathematical models to predict property loss and damage for centuries. When they sell policies, insurers collect large data-sets about their customers that are updated when those customers make a claim. In recent years, as insurers have sought to become more relevant to their customers and more efficient, they have realised the strategic importance of their data investments. They want to harness data analytics to improve customer experience significantly, whilst cutting claims handling time and costs, and eliminating fraud.

You’d be forgiven … but you wouldn’t be correct.

Reality Check

According to Deloitte’s 2020 Insurance Outlook, “The vast majority of insurer IT spending still goes toward maintaining legacy systems.” So, the fact of the matter is that most insurers haven’t begun serious tactical initiatives to make the most of BI and data-analytics capabilities because they have other, more pressing concerns like the expectations of their agents, their policyholders, and their employees. And if insurers are saddled with legacy systems out-of-date enough to prevent them from meeting those expectations, BI and data analytics slide down the priority list a bit. And there are other considerations.

Most BI and data analytics applications are targeted at, best suited for, and most affordable for large insurers with huge volumes of data. But medium-sized and smaller insurers have affordable options that will at least let them relate claims to premiums, adjust loss-cost multipliers and rates, and weed out bad risks. But trying to layer capabilities like BI and data analytics on to legacy or poorly designed systems — and/or on to inadequate underlying architectures — adds technical challenges that may not be worth the risk and cost.

So, the big issues with BI and data analytics are antiquated systems, poorly designed systems, degrees of technical difficulty, and scarce resources.

Until those big issues are resolved, strategic BI and data analytics initiatives aren’t likely to become tactical, operational initiatives.

Since we’re software developers — and given the world’s tendencies toward complexity — we thought it might be a good idea to take a crack at simplicity. So, here goes:

The Finys Suite is effectively a property/casualty policy administration system … with a few operational goodies added on. More specifically, the Suite includes all of the capabilities required of a policy admin system:

1. Rating
2. Quoting
3. Binding
4. Issuing
5. Endorsements
6. Renewals
7. Workflows to manage 1-6.

Then we added:

• Claims to make it easier for insurers to keep their promises of financial protection to their policyholders
• Billing to make it easier for insurers to automate the calculation and collection of premiums, fees, and taxes
• Business Intelligence to make it easier for insurers to aggregate, analyze, and report from their data to improve decision-making
• Portals and mobile accessibility to make it easier for insurers to share information; allow agents, vendors, and policyholders to serve themselves; and to reduce service costs while increasing customer satisfaction
• Design Studio to make it easier for insurers to configure and manage the Finys Suite and the products they build with it.

Science Meets Art

Did the Suite take a degree of technical proficiency to develop? Yes. Did it require knowledge of the insurance industry and its operational processes? Yup. Did we architect the Suite so it will scale as insurers grow? Uh huh. Did we apply a little foresight to ensure the Suite is flexible enough to accommodate insurers’ needs in the future? We did that, too. Did our years of experience developing software and working in and around the insurance industry help? Well, they didn’t hurt. Did we decide to treat our customers the way we’d choose to be treated. Yes. Quite deliberately. And that’s made all the difference.

The science of designing and building rockets is as complex as it gets. But an effective property/casualty policy administration system doesn’t have to be anywhere near that complicated. By combining the science of technology with the art of customer care, we found out it doesn’t take rocket science.

It just takes a little Finys.

It’s time to pump the brakes.

Yes. We know the year’s not quite over yet. But think about how much is behind us:

• If any of the system changes you might have taken on this year aren’t finished, they’re likely well underway.
• If your budgeting for next year isn’t finished, you only have two choices at this point anyway: (1) Panic. (2) Put a bow on it after the first of the year.
• You either completed all the organizational transformations or reinventions your were going to take on this year — or you realized they were figments of some marketer’s imagination.
• Your holiday shopping must definitely be done; otherwise, you wouldn’t have the time to be hanging around reading this post.

No matter what, the year’s winding down. If you don’t take time to wind down with it, you’ll be back in the race in the first week of January without having taken a deep breath, to say nothing of a rest or a celebratory drink.

Take Two and Call Us in the Morning*

We also know you didn’t ask. But here’s what we prescribe for the Holiday Season fast upon us:

1. Since Christmas is on a Wednesday, try to take Monday and Tuesday off, too.
2. If you can pull it off — or if your boss is going to be away — take Thursday and Friday off, too.
3. Since New Year’s Day is on Wednesday of the following week, see if you can get away with 1 and 2 that week, as well.
4. Since Hanukkah starts on Sunday, December 22, and ends the evening of Monday, December 30, just disappear until January 6 and tell your boss you thought Hanukkah was two weeks because 2019 wasn’t a leap year.
5. If you don’t observe any religious holidays, do whatever you want. The only day you really have to worry about is Valentine’s Day because … well … you know.

If you get in trouble for any of that, to paraphrase Mission: Impossible, we’ll disavow any knowledge of your actions.

Just Joking

Kidding aside, we wish everyone who reads this post — along with our customers, our prospects, and all their loved ones — a joyous, restful Holiday Season and a bright, prosperous New Year.

Seasons greetings from all of us at Finys.

* We’re not doctors or HR consultants. We don’t even play ‘em on TV. In fact, we didn’t even audition. But we think we’re on to something anyway.

One of our favorite slogans is one we saw on a t-shirt years ago. It was worn by a guy who must have been a bodybuilder — or else he was absurdly muscular for no good reason. The t-shirt read, “Get big or stay home.”

This is not a bodybuilding blog. It’s not even a single post about bodybuilding or weightlifting. And while we don’t think executives in smaller-tier insurance companies need to get bigger, they and their companies would benefit if they started thinking a little bigger.

Ante Up

When we were kids, our families had one car. We had one television set. It displayed in black and white. We had no cable service. We had no Internet. We had no cell phones. And we had land-line phone service with just one phone in the house.

Fast forward: Most families have a car for every driver in the house. They likely have smart TVs in every room, most if not all of which have LED LCD displays. Along with cable and Internet services, most homes have streaming devices like Chromecast, Raspberry Pi, Synology Diskstation, Google TV, Amazon Fire TV, Apple TV, Plex, and others. And everyone walks around with smartphones that, by the standards of even 10 years ago, are portable supercomputers.

Why is that relevant or important? It’s relevant and important because the rest of the world has moved on with technology and accepted the additional, initial costs associated with its increased capabilities. Those costs become entry cards, table stakes, and business investments in the adoption of contemporary living.

Has that happened in insurance? Not so much.

The Future is Here

Insurers are people, too. To stay relevant and competitive, they have to move forward. They have to adjust and adapt. That doesn’t mean they have to lead any technological charges. But they do have to adopt the technological capabilities and the processing functionality that will enable them to develop and introduce products more quickly, deliver service to policyholders more responsively, and react to market opportunities more nimbly.

Will there be incremental cost to adopting that technology? Yes. Just like there is with car payments, cable and Internet bills, streaming services, and data plans. But the more important question is this: What will it cost if you don’t adopt new technologies?

The new reality arrived with the future. Smaller-tier insurance-company executives and their boards have to accept this new reality or accept irrelevance.

They don’t have to get big or stay home. But if they don’t think bigger, they run the risk of getting smaller.

This is the fifth and final post in a series inspired by a Harvard Business Review (HBR) article, “The Hard Truth About Innovative Cultures”, that posited these five characteristics of effective corporate cultures:

1. Tolerance for Failure but No Tolerance for Incompetence
2. Willingness to Experiment but Highly Disciplined
3. Psychologically Safe but Brutally Candid
4. Collaboration but with Individual Accountability
5. Flat but Strong Leadership.

In the prior post, which covered collaboration and accountability, we stressed the importance of giving people responsibility — plus authority — for their given tasks. As we wrap up this series, we address the subject of leadership and share our thoughts on the way our organization works best and why.

The Buck Stops Everywhere

To summarize the HBR article’s point #5, which is consistent with much of what we wrote in our last post:

In culturally flat organizations, people are given wide latitude to take actions, make decisions, and voice their opinions … [they] can typically respond more quickly to rapidly changing circumstances because decision making is decentralized and closer to the sources of relevant information … Lack of hierarchy, though, does not mean lack of leadership … For employees, flatness requires them to develop their own strong leadership capacities and be comfortable with taking action and being accountable for their decisions.

In all likelihood, there isn’t one person in our organization who’d say it lacks leadership. At the same time, most if not all of the people in the organization would say they’re comfortable with the extent to which they’re given rein to manage their responsibilities with authority, to call the appropriate shots, and to let their thoughts be known. While ownership is an overused term, all of our people are encouraged to own their jobs. And they’re recognized and rewarded for doing their jobs well.

Connecting the Dots

Logically, all five of the points in the HBR article are related. In this series of posts, we’ve suggested the ways in which those points are related sequentially (each point feeds off the previous point) and operationally (each point strengthens the functional interactions within the organization and of its people). Writing this series has given us the opportunity to grant ourselves some objective distance from the organization, to appreciate the things we’re doing well, and to connect the appropriate dots.

We hope you enjoyed reading this series as much as we enjoyed writing it.