Fixing the Insurance Systems Ecosystem
Insurance CIOs have a very challenging role. In order to be successful, they require financial acumen, deep technical experience and an understanding of the supported business. Meanwhile the operational environment of managing hundreds of systems along with the need for new application development creates a resource strain that seems never-ending.
This scenario will remain the same unless CIOs can fix their ecosystems. The replacement of a single policy, claims or billing system will not alleviate the pressure points -- the answer is more deeply rooted in the enterprise itself. The focus must be on the ecosystem in which these systems operate.
By definition, an ecosystem requires interaction among all members of the community. In IT terms, the ecosystem is the result of years of integration activity involving many disparate systems. IT professionals have been known to refer to their system portfolios as "spaghetti charts" or "New York City sewer maps." The common theme in most IT organizations is that the ecosystem is too complex. If an organization leverages an enterprise architecture, however, this does not need to be the case.
Experience Is the Best Teacher
Through my past experience, including my time as a consultant within the insurance industry, I learned that an enterprise approach to system development is fundamental in both the short and long terms if positive change is to occur. When I became head of IT (CTO) at Ohio Casualty, I had the opportunity to put this philosophy into practice. We developed an ecosystem that brought all the technology pieces together across the enterprise. The IT organization at Ohio Casualty was remarkably successful in replacing the commercial and personal policy systems, the agency contract and licensing system, and the workflow systems for commercial and personal lines. Additionally, we created operational data stores and an enterprise warehouse.
We completed this massive amount of infrastructure work without increasing budgets or staffing. We carefully planned and executed every major development project to leverage enterprise architecture. In addition we plainly refused to write a line of code that was not reusable. Our goal was to implement an enterprise philosophy to improve our ecosystem.
Our policy systems, although completely different from a visual and process perspective, all contained the same core components. The agency contract and licensing system reused many of the components that the policy systems utilized. These core components organized information in consistent ways, which made the downstream feeds to claims, statistical systems and the warehouse easier. Without a doubt, the carefully planned ecosystem just worked better, making my life easier. (It was not easy, but easier.)
Now, as SVP at ACORD, I can take what I learned "on the inside" to support and foster the growth of an enterprise philosophy across the insurance industry and support CIOs in their missions. In fact your industry data standards organization is doing a lot to facilitate enterprise architectures. We are developing the ACORD Framework, which consists of a business dictionary -- a series of advanced object and data models representing the industry's capabilities, processes, components and information.
In August we released the ACORD information models -- advanced object models representing life, annuities, property, casualty (both commercial and personal) and reinsurance. And we are very close to publishing portions of the data model. All these models are free to our members so that they can benefit from them and more easily improve their own systems environments.
ACORD has always had excellent standards for the B2B space, both in forms and messages. Now we are providing critical assets that can help every IT organization. If you sense I am passionate about this, you are correct. I saw firsthand how this could change a company. Now I want to see how this will change an industry.
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