DIY Means Design It Yourself

When most people think about designing something — a car, a software program, a rocket, the perfect in-laws, an insurance product — they usually think about something difficult and pretty messy. It doesn’t have to be that way, at least not always.

Our customers were asking us for a toolset to give them maximal flexibility and maximal independence with minimal complexity. As we listened to their requests and took them to heart, we decided we had two options:

  1. We could make them completely dependent on us to all of the things they wanted to do by themselves.
  2. We could give them access to exactly the same toolset our designers and developers use, which would enable them to do all the things they wanted to do by themselves.

After careful deliberation, a few sleepless nights, and a seance or two, we chose Option 2.

How Do We Define Success?

“What do our customers want us to do?” We could answer that question in a multitude of ways: They want us to process their insurance transactions. They want us to manage their claims. They want us to bill their policyholders. They want us to give them the best software we can develop to do those things. The list of answers goes on. All of them are only partly correct. What our customers really want us to do is to enable them to do more business more easily, more efficiently, more accurately, and less laboriously. That’s just what our Design Studio does.

We gave our Design Studio an intuitive user interface. We created pre-built line of business templates. We provided drag-and-drop, WYSIWYG fields and process aspects. We enabled real-time collaboration. We included report wizards. We developed automated regression testing. And we made sure users could administer security administration down to the level of individual fields.

It gives our customers exactly as much self-sufficiency as they want. We meet them online in our Design Lab. In joint design sessions, we work with them to establish functional objectives. We teach them how to configure the Suite, their products, their states, and their lines of business. We show them how to do those things simply and efficiently. We tell them they can have all the autonomy they want, but we’ll always be there to help them out and to back them up. That’s why we define our success by the success of our customers.

But help with your in-laws? Not so much.

What’s Up?

Now that we’re more than halfway through 2021, we were thinking about the de rigueur predictions that will soon be coming our way for 2022. For some reason, that put us in mind of the classic Budweiser commercial from 1999. After that, we decided to get serious; although, we really didn’t feel like it.

It’s safe to assume that most of the 2022 predictions for insurance will have to do with technology. The list will, no doubt, include:

  • Artificial intelligence (AI). When more and more homes and cars contain voice-activated assistance, the insurance industry will continue to adopt AI as it can, particularly in the interests of personalizing the policyholder experience and the policyholder’s rates. How will AI do that? With …
  • Machine learning. Simply put, machine learning is stored data that constitutes acquired experience. Combined with AI, that acquired experience can be analyzed and translated into actionable information and automated processing. And where will all this stored data come from? From …
  • The Internet of Things (IoT). Given the connectivity of everything on the Web — including smart-homes gadgets, automobile sensors, wearables, online retail sites, referral-program software, and who knows what — insurers that don’t tap into IoT technology are going to miss the boat and then some.
  • Telematics. See AI, machine learning, and IoT.
  • Social media. Given the pace at which things evolve, it’s interesting to look at how quickly definitions of things like IoT seem to evolve. They used to focus on hardware devices. Now they include every social-media site imaginable, all of which are tracking us like bloodhounds in the woods or sharks in the water.

Sneak Peeks

Chances are pretty slim that we’ll end up in the fortune-telling business. We’ve been developing insurance technology for so long at this point that a career change might not be the most prudent decision we could make. But you really don’t need powers of prognostication to see what’s coming for the insurance industry, technologically speaking.

The industry will continue to follow its conservative nature, as it should. It’ll prudently adopt technologies as it can. It’ll wisely heed the needs of its policyholders. It’ll stay a few steps back from leading edges, which is a much safer place to be anyway. But in the end, it’ll come around, as it always does.

That’s what’s up.

Don’t Choke on Chokepoints

The June edition of Risk & Insurance ran an article about the blocking of the Suez Canal by the cargo ship, Ever Given. In the print edition, the article was entitled, “CHOKEPOINT!” In the print and digital editions, the article starts with this:

In March, a large container ship blocked the Suez Canal for six days, costing nearly $400 million an hour in global trade losses. Now, cargo and vessel owners are asking, “Who foots the bill?”

That got us thinking about other chokepoints in the insurance industry. And while those chokepoints may not be as obvious as the blocking of the Suez Canal, the short-term, long-term, and additive costs of those chokepoints may actually amount to considerably more than $400 million.

Let’s Go To the Replay

For the sake of argument, we’ll assume a small insurance company has 100,000 premiums in force. If one administrative chokepoint costs the company just a dollar in resources (time and/or money) and opportunity per policy, eliminating that chokepoint would save the company … well, you can do that math. Chances are that insurance company,  any insurance company, has more than one chokepoint. And if you consider a large insurance company — one with 80 million policies in force, let’s say — the ROI on eliminating the corresponding chokepoints is a stakeholder’s dream come true.

In the article we’ve cited here, Marcus Baker, global head of marine and cargo from Marsh, is quoted several times. If we take one of his quotes and abbreviate it slightly, his argument extends beyond the blockage of the Suez Canal. Here’s the quote abbreviated:

We saw this problem play out early in 2020 … One of the things that this pandemic has shown us and even an incident like the Ever Given has shown us is that … Rather than focusing on the efficiency and low cost, we really need to look at a resiliency model.

That’s a pretty powerful point. It suggests resilience is precipitated by readiness. And readiness can be precipitated by making sure your people, your processes, and the technology products you use are responsive, flexible, configurable, and scalable.

We might even go so far as to suggest it takes a good chokepoint now and then to help us be prepared for the next one.

Rates of Change

Figure A

We seem to have been writing and speaking a good deal lately about change — the changes undertaken during the COVID pandemic, the changes that could have and should have been considered before the COVID pandemic, and the changes we should be undertaking now in anticipation of the next pandemic or the next catastrophic business interruption. In particular, we’ve been writing and speaking about digitalization, the adoption and adaptation of digital technologies for business processes. In other words, the conversion of text, pictures, or sound into digital form for automated processing on computers, as opposed to the manual processing of analog media like paper or whiteboards.

During all of that writing and speaking, it occurred to us that the lion’s share of the friction being experienced in the move toward digitalization is attributable to rates of change. In general terms, we’re referring to the technology-adoption curve that’s typically rendered like the image in Figure A. Somewhere between the so-called innovators and the early adopters, there’s a gap. Skepticism, fear of change, and fear of failure live in that gap. As people begin to creep across that gap, the early majority and the late majority adopt a given technology as it begins to succeed and make its adopters feel safe. By the time the laggards get around to adopting the new technology, it’s already being superseded by a newer technology. And on it goes.

Context, Please

In more specific, insurance-industry terms, the gap exists between policyholders (and prospective policyholders) and the insurance companies with which they choose to do business. And the insurance industry’s historically slow pace of technological adoption and adaptation is creating greater friction and lost opportunity. To be fair, individuals (like policyholders and prospective policyholders) can explore and embrace technological advancements — and change their behaviors and their expectations — more readily and easily than companies and entire industries can. But that reality notwithstanding, friction and lost opportunity exist.

We should bear in mind that there are numerous definitions of legacy. Two of them are:

  1. anything handed down from the past, as from an ancestor or predecessor
  2. a gift of property; a bequest

If we remain mindful of both of those definitions — and if we embrace the technological change that shapes the behaviors and expectations of our customers — we can transform #1 into #2.

That will bring our respective rates of change much closer to each other.

Have You Looked?

Everyone seems to be talking about 2020, the coronavirus pandemic, and the lessons they’ve learned from both. What lessons did you learn? Have you looked for them? We mean really looked. Are you sure?

Objectively speaking, it was a year of change. It had to be. As we were reminded constantly, the old normal was gone. It also was a year of opportunity, depending on they ways in which you viewed, accepted, and responded to the changes. As Sun Tzu said, “In the midst of chaos is also opportunity.” Now we’re almost halfway through 2021. If we learned anything in 2020, we should be well along in applying it now.

Here’s What We’re Doing

We’re investing heavily in research and development. And since we’re quoting people, we’ll point out that, while Malcolm X didn’t work in the insurance industry, he did say, “The future belongs to those who prepare for it today.” And if 2020 taught us nothing else, it taught us the best way to accommodate change is to always be anticipating it and preparing for it.

First and foremost, you want to try to get ahead of the curve. A lot of insurers were well-positioned for change. For those that were, 2020 paid dividends for them. Another of our favorite quotes is from Will Rogers, who said: “Even if you’re on the right track, you’ll get run over if you just sit there.” Case in point: One of our insurance carrier clients told us 2020 was their most profitable year ever.

Here’s What Insurers Should Be Doing

It’s important for insurers to put themselves in a position to take advantage of the turmoil. That may sound like a strange thing to say in a risk-averse business. But it’s true, nevertheless. If they employ the OODA loop — observe, orient, decide, act — they’ll be able to better identify their opportunities: Do they have the right systems in place? Are those systems modern enough to meet the growing demands of the 21st century — flexibility, configurability, responsiveness? Are they maximizing and optimizing their digital channels? Are they making sure they have the information they need to make the right decisions, to act quickly, decisively, and fruitfully in the face of uncertainty?

Are they giving their prospects and policyholders better digital experiences? Are their digital capabilities backed up by capable, well-staffed call centers to ensure service is accessible and well-managed if issues have to be escalated beyond digital channels? Are they offering their policyholders more and better opportunities for self-service? What about their agents? Are they looking out for them? Are they providing the fully functional portal to give them access to what they need? Are they providing mobile access? Do they have the tools to sell more and process less?

The Moral of the Story

The moral of this story is that 2021 will demonstrate what we learned in 2020. As long as we looked for those lessons, learned what they had the opportunity to teach us, and determined to take those lessons into the future, it’ll be harder to surprise us the next time.

The people who are exceptionally good in business are not so because of what they know but because of their insatiable need to know more.
(Michael Gerber, The E-Myth Revisited)

That Thing’s Gonna Blow Up

We’re old enough to remember the days when our grandmothers would come to our childhood homes to help out with some of the chores. As she was washing the dishes by hand, we’d say, “But Gram, we have a dishwasher.” As she was washing the clothes by hand, we’d say, “But Gram, we have a washing machine.” In response to both of those statements and referring to either of those machines, she’d invariably say, “That thing’s gonna blow up.”

We recalled those days and those grandmotherly conversations when we read a recent post from Celent. It was called, “WHAT HAPPENS WHEN? FIVE TIPS FOR FULLY DIGITIZING THE CUSTOMER EXPERIENCE”. We didn’t think it was important enough to put in all capital letters. But what do we know? The upshot of the post is this:

Too many live humans begin tedious processes that take too long and upset the customers. These processes are a drain on operating costs and keep the expense ratio high … institutions need to … utilize flexible rules-based systems with open integration protocols to automate human-based processes out of existence.

Well, yeah. If human beings are involved in anything, there’s the potential for errors. The more more human beings involved, the greater the potential for error. If that weren’t true, we wouldn’t have Murphy’s Law.

Can You Digit?

Here are some rules to live by and to run your business by:

  1. Minimize the number of manual processes.
  2. Digitize and automate as many processes as you possibly can.
  3. The faster and more accurately you can perform any business process, the more responsive you’ll be (to say nothing of efficient and profitable).
  4. The more responsive you are, the happier your customers will be.
  5. If your software vendor can’t help you live and run your business by those rules — if the vendor can’t help you digitize, automate, and be as responsive as your customers expect you to be — you’re working with the wrong vendor.

Your grandmother didn’t live and work in a digital world. But your customers do. And if your customers do, you do, too.

Don’t worry: Digital technology isn’t going to blow up. But your business might blow up without it.

What Does Finys Stand For?

You might be surprised at how many times people ask us what Finys stands for.

For a while, we thought about trying to make it an acronym. But in case you haven’t tried it, finding useful words that start with y is pretty tough. The best we could come up with was Finys Is Now Your System. That seemed a little presumptuous. So, we dropped the acronym idea.

Okay. We’re kidding. Finys was never an acronym, and we never intended it to be one. But we do get asked what it means quite a bit. So, we might as well tell you.

The Truth of the Matter

Finys is a play on the word, finesse. Inspired by the saying, “Don’t force it. Use a bigger hammer,” we were convinced we could build a system, a suite of separate but interconnected modules, that could be implemented and operated with a bit more flair and flexibility than other systems. We wanted to develop a suite that would process property/casualty insurance configurably, without imposing a cumbersome array of prescriptive rules and limiting constraints. We even wanted to include a degree of artistry. That’s why we call our configuration toolset — that features an intuitive user interface; pre-built line of business templates; drag-and-drop, WYSIWYG fields and process aspects; and report wizards — Design Studio.

We also wanted to build some finesse into the way we did business, the way we priced and implemented the Finys Suite. That’s why we assign fixed costs for the product and its implementation, amortized over five years. Putting that kind of skin in the game clearly demonstrates our commitment to doing right things, even as it significantly mitigates our customers’ risk and exposure. And it clearly indicates their success is as important to us as it is to them.

The Bottom Line

So, what does Finys stand for? It stands for integrity. It stands for reliability and accountability. It stands for flexibility and configurability. And it stands for satisfied customers.

If Finys were an acronym, it could stand for Finys Is Nifty, You See.

But it’s so much more than that.

The Next Level

We’re in the midst of March Madness. We love the games and everything. But one of our favorite parts of the experience is that we get to hear any number of coaches and players in the innumerable post-game interviews saying things like this: “We have to take our game to the next level.” Or this: “Well, our shots were falling pretty good, but we have to take our defense to the next level.” But it’s not just sports. The subject could be business, personal finances, the landscaping around your home, the resolution on your TV screen, pet grooming, your relationship with your significant other — anything. People are always talking about the next level:

“Take it to the next level.”

“We have to get this thing to the next level.”

“If you want to get anywhere in life, you have to take your attitude to the next level.”

Are we the only ones who wonder what the next level is? Don’t we need to know the level we’re on before we can determine the next one? How many levels are there?

Deep Breath

In assessing any claims about or aspirations towards the next level, we need to separate rhetoric from reality. Let’s take our software for example. Do we want to take the Finys Suite to the next level? Absolutely. Do we know what the next level is? Not exactly. And the reason we don’t exactly know is that we’re not going to determine it in a vacuum. We’re going to look at what we’re dedicated to doing — property/casualty insurance administration.

We’re also going ask our customers what works well, what might not work so well, and what they’d like to see next. We do that continuously through the input of our Innovation Advisory Board. We’re going to remain as informed as we can by interactions at industry events, talking with prospects, constant reading and reviews of insurtech and industry trends, and maintaining advisory relationships. We’re going to assess the cost/benefit of what we can do and when. And we’re going to map out the next successive levels in the way that makes sense for all parties involved.

How about this? Let’s agree everything and everyone wants to get to the next level. But let’s also agree we have to evaluate where we are. We have to determine and define the next level. And we have to develop a plan to get there.

Are you ready for the next level?

Uncertainty: Welcome To the Future

’Tis impossible to be sure of any thing but Death and Taxes. (The Cobbler of Preston by Christopher Bullock, 1716)

Many of us are, no doubt, familiar with those two most famous examples of certainty. And the fact is, everything else is pretty much up for grabs. Flash back to the end of February 2020. How many of us imagined the ensuing year would transpire the way it did, would see a global pandemic, would change the ways in which we live, work, and socialize? We rest our case.

The abiding lesson from the past year, of course, is that we all need to be as well prepared as possible for the unexpected (short of clairvoyance). We need to be as resourceful as possible as we confront the unexpected, however it manifests (short of a planet-destroying galactic calamity). And we have to be as mindful as possible of the needs of those we serve (short of surveying them non-stop, which might be the only thing worse than a planet-destroying calamity).

What Happens Next?

We have no idea. If we did, we’d be in a completely different line of work; although, we’d probably shy away from phone psychic. Kidding aside, and even though we really don’t know what will happen next, some things seem fairly predictable:

  • If you sell property/casualty insurance, you’ll have prospects and policyholders.
  • If you have prospects, they’ll want to be able to evaluate and purchase policies, to understand coverage limits and exclusions, and to have flexible billing and payment options.
  • If you have policyholders, they’ll want to be full informed at all times, to have digital access to their policy and claims information, and to have whatever level of self-service with which they might be comfortable.
  • If you want to be as responsive to your prospects and policyholders as they expect you to be, you’ll need a processing suite with the functionality to provide that responsiveness and with the scalability to grow as your business grows.

If we go any farther than that, we’ll be tooting our own horn. And nobody needs that.

But we’re here to help when you’re ready to live with uncertainty.

And you won’t need a psychic hotline.

Digitalization: Déjà Vu All Over Again

Like seeing a car you’ve never seen before or learning a word you never knew before, as soon as you see the car or learn the word, they seem to be everywhere. Such is the case with digitalization. So, we weren’t surprised at all to see a Transunion consumer study, the results of which were published with the title, “COVID-19’s Impact on the Insurance Industry Will Continue Well into 2021”. Under trend #3, the Transunion survey revealed this:

Almost half of respondents (47%) filed an auto and/or property claim in the last year, and of those, nearly four in 10 (39%) used a mobile app, website portal or e-mail. Consumer preferences for interacting via digital/online platforms also support this trend. The survey found respondents preferred to communicate with an insurance provider primarily via e-mail (32%) and telephone calls (32%), followed by an insurer mobile app or website portal (18%). As digitization grows, insurers must balance introducing and expanding digital customer interactions while also delivering friction-right experiences and protecting against fraud.

It’s a little surprising that 64 percent of the respondents still preferred email and phone calls (2,015 of 3,148). But we can expect web and mobile usage to trend up. Forewarned is forearmed.

One Digit at a Time

We’ve talked about digitalization in the past. We’ve written about it, too. And we know it’s déclassé to quote ourselves, but we’re going to give ourselves permission, just this once:

Most insurers were relatively well-equipped for hybrid operating models and even WFH [before COVID]. But meeting the needs and expectations of their policyholder and prospects who live in a highly digital world? Not so much.

So, what’s to be done? First, make sure your core systems are modern (or modernized) enough to accommodate digital capabilities and interfaces. Second, make sure your portals and mobile apps are maximizing self-service capabilities for your policyholders, your agents, and your other constituents. Third, make sure you have a plan to get you optimally digitalized, starting with the steps you can take most quickly to yield the greatest benefit at the least cost, then work your way up from there. Fourth and most important, communicate with all of your constituents to make sure you’re giving them the functionality they want and to earn their trust and their loyalty.

The word, digitalization may sound daunting. And the phrase, digital transformation, may be downright terrifying. But with a sound plan and prioritized steps, you’ll get there. Transunion’s 64 percent won’t be able resist progress for long.

If you need help, we’re here when you need us.