We know it’s bad form to quote ourselves. But we have to make an exception here.

We recently watched a panel discussion about the ways in which insurers responded to the effects of the coronavirus and its ensuing shut-down. One comment, from Sean Ringsted of Chubb, jumped out at us:

I draw a distinction between, say, operating remotely and the digital age. For us, the digital age is a much broader perspective in terms of how we think about product and service, and how we think about the customer. By and large, we haven’t moved forward as an industry collectively in that regard. It’s shown that we can operate remotely, but we’re a long way away from being an industry that’s operating and succeeding in a digital age.

To paraphrase Yogi Berra, we had a deja vu all over again.

You Don’t Say

Bad form notwithstanding, we couldn’t help recalling that, on October 8, 2018 we wrote this:

Digital transformation is almost always interpreted to be about technology. It’s not. Here’s why: Unless we manage to experience some kind of once-in-a-millennium event sometime soon, there won’t be any technological transformations. But what we do have is a data transformation. More specifically, with the digitalization of data — and with the technological progress we’re making in storing, extracting, analyzing, and applying data — that’s a transformation worth heeding and on which we should be capitalizing. And it feels like progress.

And on February 3 of 2020, we wrote this:

Objective #1 is to look at things from the perspective of the prospective buyer … But [insurers are] facing the sobering realities of Objective #2 — getting their core systems to function at levels sufficient to achieve Objective #1. If products remain difficult to change, if integrations continue to be a challenge, and if BI isn’t meaningful enough to improve operational decision-making — then customer behavior, responsiveness, accessible information, and self-service capabilities become tough nuts to crack.

Does that make us special? No. Does it make us clairvoyant? Uh uh. But it does make us prepared. And it makes us prepared to help our customers implement the digital platform that will enable them to scale, to accommodate market changes and policyholder demands, and to operate in the world in which their prospects and policyholders already live.

If it takes a worldwide pandemic to get us there, so be it. But we do have to get there.

Imagine you have some new friends coming over for dinner. You really want to make a good impression, but your house has a few things that need to be fixed. While not many friendships are lost over broken screen doors, shabby paint, or a picture that needs to be hung, it would better if things were in order. Your honey-do list has been escalated to a more urgent status. What you do next will depend upon your level of skill (are you handy?), the resources available (do you have the right tools?), and how much time you have before you guests arrive (how urgent is your need?). This scenario is similar to situations insurers find themselves in when it comes to maintaining and updating their core systems.

Almost all of the insurers we talk with want to do more themselves, with less reliance on their own busy IT departments and self-sufficient from third-party vendors. Imagine being an insurer, moving your office location, and having all your bills and other print output continue to go out with your old address for more than a month. Imagine that being the result of a third-party vendor that said it would manage all changes in the system, with no provision for you to make your own changes. If you think that can’t happen, maybe it’s because it hasn’t happened to you … yet.

Well, Yeah …

The situation above is exactly why modern core systems come with toolsets that empower users to make significant design, configuration, and product-maintenance changes on their own, if they want to (most do at some level). The skillsets required have evolved from programming to drag-and-drop WYSIWYG tools and proficiency with Microsoft Word and Excel. And why would you want to pay a third party to make mundane changes to verbiage in forms and addresses or minor tweaks to rating algorithms. In many cases, the time required to request a change from a third party exceeds the time it would take to do it yourself. The vendors will always be there to help pick up the slack if resources or timing are an issue.

Going back to our analogy, why wait for (and pay) a handyman to tighten some hinges or drive some nails — if you can even find a reliable handyman? If you prefer to have someone else do things or you’re too busy for home projects, that’s one thing. But doesn’t it at least make sense to have the ability and the tools if you have to do things yourself? What are the risks if you can’t?

Maybe most important: What will your new friends (and policyholders) think?

We recently came across an article in which Jack Salzwedel, chairman and CEO of American Family, was quoted as having said this:

We’ve made the comment that it took COVID and physical distancing to bring us closer as an organization. And I think there’s a lot of truth in that.

We don’t know if that will come to constitute anything like the new normal that’s become so popular to talk about since the pandemic affected us all. But we do know the truth of Mr. Salzwedel’s statement is reflected in our relationships with our employees and our customers. And we also know the pandemic has caused us to re-examine our notions of connections — from professional to personal, from the office to home and family.

What’s Old is New

There might not be any method of connecting or communicating older than personal conversation. But a few others are right up there:

• Phone. We were tempted to write telephone. But that would have taken us back to dinosaurs, and people weren’t even conversing that long ago. Nevertheless, being able to pick up the phone has become increasingly handy as the pandemic has stretched on. We don’t text with our customers. But texting is a great way to connect and share quick messages with friends and family.
• Email. This technology’s been around for a while; although, it post-dates the phone by a hundred years or so. If you don’t count the phone invented by the Italian inventor, Antonio Meucci, in 1849 — or the phone invented by the French inventor, Charles Bourseul, in 1854 — Alexander Graham Bell won the first U.S. patent for the telephone in 1876. Ray Tomlinson didn’t get around to creating email for the ARPANET until 1971. But it turned out to be, and remains, an effective means of communicating and retaining dated documentation of that communication.
• Collaboration platforms. While they pre-date the coronavirus, collaboration platforms like Google Meet, Microsoft Teams, and smaller platforms like Slack, Happeo, Jostle, Flock, Asana, and others have proliferated during the pandemic. They may not be for everyone. But they’re there. And they fill a need we may not have seen coming.

We don’t know if Mr. Salzwedel intended any or all of that. But we’re grateful he prompted us to think about all of the means by which we create and maintain connections … old and new.

Maybe we’re closer to a new normal than we thought we were.

As human beings and business owners, many changes have been precipitated by the coronavirus pandemic. In contending with everything from restricted travel to social distancing, from working at home to wearing masks in public, we’ve found we’re able to adapt and conform. We’ve also found we’ve been able to learn. In all the lessons available to us thanks to COVID-19, these are among the most important:

Relationships

One of the definitions of commerce is this: “social relations, especially the exchange of views, attitudes, etc.” In that context, all of us engage in commerce, whether it be personal or professional. The success we desire, personally and professionally, depends on building and maintaining that commerce. It’s the responsibility of each of us to initiate it — to make contact with the people in our lives to assure them we’re here. We care. We support. We’ll do everything we can to help.

Responsibility

Now, more than ever, we are our brothers’ keepers. We’re responsible for ourselves and each other. Whether looking out for family members, friends, customers, or random strangers who might need a helping hand, each of us bears the responsibility to do what we can. It doesn’t have to be much. Whenever we ask one particular person we know what he needs, he always responds, “A few kind words.” Most of us can do more. But don’t underestimate the power of a few kind words.

Responsiveness

One of the peculiar challenges of the coronavirus pandemic is that it’s created senses of urgency. That makes it all the more important for us, in our interactions with each other, to discern the real from the reflexive, the actual from the perceived. Since it isn’t possible for all things to exist or transpire on the same level of priority at all times, we just need to stop for a moment. Breathe. Assess. Respond accordingly and appropriately. It may take a little practice, but we’ve gotten this far, haven’t we?

The Good News

Fortunately, we don’t have to go back to school to learn any of these lessons. All we really need to do is pay attention and do what we likely would have done anyway. Among the positive aspects of the coronavirus pandemic is that we’ve shown we’re capable of practicing The New Three Rs, even without being told we should.

For those new to the insurance industry, the length and complexity of the system-purchasing process must seem overwhelming and, at times, unnecessary. Overkill might come to mind, but the much-maligned request for proposal (RFP) process drives technology selecting and purchasing in the risk-averse insurance industry. For core administration systems (policy, billing, and claims), RFPs can provide an organized approach to working through and scoring dozens of seemingly viable alternatives. But three vitally important things are often neglected in the RFP process, all of which should be primary considerations for a long-term partnership with a system vendor:

1. Consider how well the base system meets the needs of the organization. Most systems have out-of-the-box entry screens, workflows, reports, and processes that can speed implementation and production. While some level of customization is almost always requested, remember: More customization means longer timelines, higher costs, tougher upgrades, and more complicated maintenance. Weigh what’s available vs. what’s possible.
2. Pay attention to the ways configuration tools work and how such tools will be used during implementation and for ongoing system and product maintenance. The capabilities of configuration tools are frequently overlooked because vendors typically set up the first few lines of business. So, configuration tools aren’t given the same scrutiny as policy, claims, or billing functionality. Consequently, post-implementation, insurers rely on vendors to make changes and updates or give those responsibilities to IT staff members. Either way, the capabilities of the configuration tools will affect time to market for future changes or new lines of business.
3. Sending an RFP to a number of prospective vendor partners is like speed dating in the hope of finding a few good candidates. But technology aside, don’t overlook cultural and philosophical rapport. Differences in work ethic and responsiveness have caused many projects to fail in discord and dysfunction, especially if communication is reduced to procurement or consulting channels, rather than direct interaction between stakeholders and vendors. After contracts are signed and the project kicks off, two companies will aspire to be long-term partners. That only happens through cultural compatibility and alignment of goals. That compatibility and alignment of goals can only be achieved through extensive, open communication. And that communication, ideally, should be conducted face to face.

Take the Time, Not the Headache

A popular corporate axiom says, “There’s never time to do it right. But there’s always time to do it over.” When it comes to core system replacements and implementations, that’s a recipe for disaster. Insurers may never recover from the time and money lost to a bad vendor relationship. That’s why underwriters, claims examiners, accountants, executives, and IT staff member have to be comfortable with the vendors and the systems they select.

Conducted conscientiously, the RFP process can ensure appropriate compatibilities between insurers, vendors, and systems. If you take the time to do it right, you’ll save yourself the headache later.