P&C Specialist recently published an article that gave us pause. The title of the article is “Insurers Struggle to Keep Staff Connected, Engaged“. In case you haven’t yet subscribed to P&C Specialist, this is the part that caught our attention:

With the new world of remote and hybrid work, many employers are struggling to boost employee connections and engagement as they strive to attract and retain talent … Judy Busby, senior vice president of executive search and corporate strategy at Chicago-based insurance recruiting firm The Jacobson Group, [said] “It’s harder for all of us to know how to engage our team” because most employees aren’t working from the office five days a week … “People want to work for companies where they have friends” … That triggered the great realization, great reassessment and great restlessness, leading up to the great resignation … It also has fueled “quiet quitting,” where employees do the minimum amount of work required and are psychologically detached from their jobs.

A number of things warrant comment here. We’ll take them in order.

From the Top

First, since we’re headed into the third year of COVID-19’s influence (actually, the fourth, if you count the fact that the novel coronavirus originated in 2019), we’re not sure remote and hybrid work any longer constitute a new world. While opinions about and preferences for remote, hybrid, and return-to-office work will remain forever divided, most organizations have figured it out by now. And if it’s harder for all of us to know how to engage our team, that means there’s a little more figuring out to do.

Second, people want to work for companies where they have friends. Well, yes. But there are a couple of other things to consider: (1) If you work remotely, you can still have friends, work with them, and communicate with them in any number of ways about work or anything else. (2) The larger the company in which you work, the more likely you are to meet folks with whom you become friends. Others? Not so much.

Third, the great realization and the great reassessment were inevitable. The great restlessness was already upon us. COVID just shortened the fuse. And the great resignation is more like the great realignment or The Great Awakening. Given how many people were likely less than satisfied with their jobs, the COVID lockdown was an overdue opportunity to take stock, to re-assess, to place different values on our lives and our time, and to make different choices. And that brings us to …

Fourth, quiet quitting is just a new name for an old phenomenon. Slacking off. Dragging your feet. Sleepwalking. Going through the motions. Phoning it in. Call it what you like. Operating at less than peak performance and psychological detachment are as old as humanity.

The New Normals

No. There isn’t a typo in that subhead. There are two new normals. They’ve actually been around forever, too, like operating at less than peak performance and psychological detachment. But thanks to COVID, we’re now more aware of them and painfully so. The new normals are change and uncertainty. That means The Great Awakening isn’t a one-time event. It’s necessarily ongoing, evolving, and unpredictable. We can evolve with it — embrace it, roll with it, and learn to make the most of it — or not.

The choice is ours … and yours.

We don’t consider the insurance industry or insurance technology to be particularly militant. But we suppose it’s possible for martial metaphors to sneak in almost anywhere. At least that’s what we thought when we saw this headline in Carrier Management: “Tech Arms Race Favors Giant Commercial Carriers“.

In an interview cited in the article, Mo Tooker, head of Middle Market and Large Commercial business at The Hartford said this:

You get to a place of scale that really allows [larger insurers] to outperform—to take advantage of data and data science and help your underwriters and claims adjusters in a way that changes the game altogether in the future. This is a place where we will feel a bifurcation in the marketplace. There are only a handful of carriers that can make the investments that we’re describing here … There aren’t many that can keep up that level of investment year after year after year—and that creates a gap that grows larger year after year after year … a “nuclear arms race” in the industry.

Call us sensitive, but that seems like an alarmist characterization in any context. And in the context of escalating geopolitical conflict, it’s some combination of inappropriate and overkill. Most important, it’s inaccurate.

Let’s Take a Deep Breath

Yes. Insurance companies can spend millions of dollars on technology. Yes. They can throw good money after bad in efforts to remediate failing implementations. Yes. The larger the company, the more expenses — foreseen and unforeseen — they can absorb without going out of business. But that doesn’t mean they have to.

The fact is technology is one of the few things that gets less expensive as it gets better. Modern core-processing technology is much less expensive — and much more sophisticatedly capable — than it was 20, 10, or even five years ago. And with numerous well-funded insurtechs entering the market, smaller carriers with modern systems will have the option to choose the proven winners without risking large capital expenditures.

Are we biased? Sure, we are. But we’ve earned the right to be. We’ve demonstrated the truth of our convictions with more than 30 insurance companies of varying sizes.

Large insurance companies don’t need to be in an arms race.

And they don’t have to shoot themselves in the foot.

While thumbing through the February edition of CIO magazine, we came to this article: “A tsunami of IT project disasters is on the horizon“. You already feel better about that core system replacement you’ve been contemplating, don’t you?

If that didn’t cheer you up, this certainly will:

We’re talking spectacular failures that disrupt supply chains, delay the reporting of financials, and blow up the careers of seemingly competent executives … These are the types of failures that are created when enterprises “go-live” with an implementation that, in hindsight, will be deemed done in a reckless fashion.

We love the smell of Chicken Little in the morning.

The article goes on to list four harbingers of doom (the actual phrase used in the article), along with three tips for avoiding the impending apocalypse:

• Make it real.
• Establish go-live criteria early.
• Independent view.

If you’re up for it, you can read the entire article. Regardless, we humbly off three other means of averting the cataclysmic consequences predicted in CIO.

Count ‘Em

No enterprises have to fail. No careers of seemingly competent executives have to be blown up. No hindsight will be necessary. And there will be no recklessness involved or accused if you follow these three simple rules:

1. Know your vendor. How long has your vendor been around? How many customers does it have? What do those customers have to say about the vendor?
2. Know your vendor. Is your vendor financially and organizationally stable? Is it heavily leveraged? If so, who are its investors? How long have they been invested? Are they getting a return on their investment? Does the vendor’s responsibility to give its investor(s) a return affect its pricing? Are you sure?
3. Know your vendor. How many implementations has your vendor done? How many were successful? How many were on budget? How many of its customers came to them after another vendor’s implementation failed?

We Get It

We understand the prospect of a system replacement is scary. If it didn’t make you a little nervous, we’d be worried about you. That’s why we’d like you to know our worrying goes into making each implementation as smooth and successful as it can be. If it weren’t, our customers would go elsewhere.

But they don’t.

For reasons we can’t even recall, we were doing some research in The Complete and Total History of Abbreviations and Acronyms in the Whole Entire English Language (TCATHOAAAITWEEL) when we came across TCO. We certainly knew TCO stands for Total Cost of Ownership. But we didn’t know that hadn’t always been so.

According to the TCATHOAAAITWEEL, TCO had initially stood for Too Costly Overruns. One day, while working in the language lab at Bletchley Park, Sir Randolph Smedley-Whyte was trying to figure out how to build the Enigma Machine British Intelligence needed to break German codes during World War II. Given the shoestring budget on which the agency operated, Sir Smedley-Whyte was afraid his superiors would be wary of too costly overruns (TCO).

One fateful day, he was joined in the lab by a counterpart from the Russian NKGB, Sergei Agafonov. During an all-consuming deliberation in which he’d lost all sense of self-awareness, Sir Smedley-Whyte blurted out, “The Prime Minister will never approve the building of this machine. He’ll say it’s impossible because of too costly overruns.

On hearing that, Sergei said, “You have to put a more positive spin on it, Dude. Too costly overruns has way too many negative connotations. You’d be better off if you changed TCO to total cost of ownership. Then you’d convince Churchill if he doesn’t build it right the first time, his too costly overruns will go through the roof.”

Sir Smedley-Whyte looked at Sergei in utter astonishment. “That’s bloody brilliant! I’d never have thought of it. But I had no idea you spoke English.”

Sergei replied, “Я должен сломать тебя, and the rest is history.

Get it Right the First Time

When you’re looking for a core insurance-processing suite, you don’t need Sir Randolph Smedley-Whyte or Sergei Agafonov to prevent too costly overruns (TCO) and to ensure a much lower total cost of ownership (TCO). You only have to know a little bit of history and make sure your due diligence includes the track records of the vendors you consider working with.

In addition to ensuring your satisfaction, you’ll be sure to prevent one TCO and to benefit from another TCO.

The choice, as always, is yours.

Now that we’re almost through the seventh month of 2022, we decided to get a jump on the upcoming year and publish a list of the trends we hope to see in 2023.

Since we wrote about no-code/low-code platforms in February of this year, we were inspired to fire preemptively by something we found in Capgemini’s Top Trends in Property/Casualty Insurance: 2022. It was this:

P&C insurers are increasingly adopting no-code/low-code platforms to compress application development cycles, improve efficiency, and go to market faster … No-code and low-code platforms with built-in, ready-to-use software development components enable insurers to create and deliver new apps faster than traditional methods.

Since we’d rather be early to the dance than late, here are the Top Five Trends we hope to see in 2023:

1. Technology consultants, analysts, and trade publications will no longer write about existing technologies as if they’re new or emerging.
2. Technology consultants, analysts, and trade publications will know what vendors in the industry actually offer, rather than trying to make it seem as if they’re ahead of some curve.
3. Technology consultants, analysts, and trade publications won’t be quite so quick to fall in love with whatever they think the next big thing (TNBT) might be.
4. Technology consultants, analysts, and trade publications won’t write about digital transformation as if digital transformation hasn’t been underway since we all survived Y2K.
5. Technology consultants, analysts, and trade publications will actually define insurtech, rather than applying the term to everything from Ziggy and Gomer in their garage with a coding handbook to startup MGAs and insurers.

Who’s On First?

At the time at which there was still a proliferation of print publications in the insurance industry, we used to bet people that if they ripped the covers off the trade magazines, ignored all other indications of publishing dates, and tried to guess when those magazines were published, they wouldn’t be able to do it. Given the fact that the magazines were all writing about the same things ad infinitum, we never lost a penny.

The most radical digital transformation in the insurance industry is that technology consultants, analysts, and trade publications now publish virtually what the magazines used to publish in print.

We hope they get better at balancing their affinities for TNBT with pragmatic looks at what exists in the present.