The Case for a Different Discussion Around Core Administration Technology

In some corners, critical discussions around core system technology have changed dramatically.  Just a few short years ago it was all about issuing policies and bills faster, settling claims more accurately, reducing error ratios, automating routine processes, and utilizing industry data standards—and mostly just for personal lines. Clearly these are important business outcomes, and the technology that supported these results was a lot more complex than a quick example can illustrate.  Anyone who worked on these installations can testify to that. However, relative to today’s discussions about core system technologies, it’s worlds apart. 

During the Connections Conference, emerging capabilities were highlighted.  Some were important new areas of functionality—which is always welcome news—but the real game-changers were:

Digital: Multiple-device response, portals, and social media utilization, for agents, consumers, and employees;
Data: Including data hubs, data visualization, new third-party data source integration, and real-time data usage;
Analytics: Including fraud analytics, concentration calculations, persona-specific visual analytics, and analytics dashboard for tablets; and
Cloud: An additional choice for deployment, allowing insurers to change their strategic response timelines and transition to different pricing models.

Although these topics aren’t new, the significant point is that the discussion wasn’t about the two- to three-year future of these initiatives, but rather about actual 2016 execution. The other significant point was that the audience wasn’t squirming uncomfortably in their seats and rolling their eyes. There was body language of a group “high five,” with a measure of “right on.” The insurers in the room want, need, and welcome these capabilities. The big difference is that it’s part of core technology across all three areas, across multiple products, and across multiple geographies. It’s not theory—it’s reality.

It always gets my blood pressure up when people refer to policy administration, claims administration, and billing administration technologies as back-office technologies, as though they were clerical automation. Given that modern core technology can be the launch pad for transformational execution of digital, data capabilities, and analytics, as well as a target for cloud, it seems to me that it’s no longer your father’s back-office core technology. All of this is a whole different discussion line.

Karen Pauli is a senior executive advisor in the Insurance practice at CEB TowerGroup. She covers a wide range of topics in property and casualty insurance, specializing in distribution, underwriting, claims, predictive analytics, core systems and business optimization.