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Phil Swift, CIO, Esurance (San Francisco)
Phil Swift, CIO, Esurance (San Francisco)

Insurers Need to Leverage Systems Flexibiliy in Changing Competitive Landscape

Esurance CIO Phil Swift identifies greater systems flexibility and a more customized Web experience as keys to remaining competitive in 2009.

As with nearly every sector of the U.S. economy, the insurance industry will be challenged in 2009. Greater systems flexibility will be required to capture new business and retain current customers in a difficult market, while both modeling and mobile capabilities need to become more sophisticated.

Phil Swift
CIO, Esurance (San Francisco)Given the state of the overall U.S. economy, the market has never been tougher for new business. With intense consumer focus on mortgages and employment, along with declining auto sales, auto insurance shopping behavior, in particular, has seen declines across the industry. To better capture online shoppers, our IT organization has to further enhance the flexibility of our systems to react to market opportunities (e.g., introducing a discount or other product change on an even quicker release cycle). The era of the "one size fits all" Web site is coming to an end, and insurers have to focus on the technology enhancements that better channel visitors through to purchase, such as customized quote and purchase flows that dynamically adapt as customers move through the process to better meet their specific needs.

Improving the Customer Experience

Clearly the tough market for new business puts enhanced pressure on companies to retain the business they have. Again, this requires IT organizations to focus on improving system flexibility so that carriers can implement customer-facing enhancements more quickly than ever before and at high quality levels.

The focus on customization of the customer experience and on retention means that factors such as the prediction of customer lifetime value, as one example, have to become much more granular than in the past. This obviously means that modeling must attain new heights of sophistication, which puts a lot of pressure on data infrastructure. The collection and storage of data, the ability for a diverse array of analysts to access data in real time, and the computing power to support very sophisticated predictive models will be a major focus for Esurance and the industry going forward.

As companies roll out enhancements at a faster pace, to ensure that quality does not suffer, it becomes imperative to provide even more tools for business teams to assess the impact of proposed changes to processes before we implement them. In resource-scarce times, this will also help ascertain which projects should or should not be pursued.

As many consumers have become more reliant on their mobile devices (which all have an increasing amount of functionality), it is paramount that Web applications are accessible from any kind of device -- whether mobile or stationary. For example, customers will begin using their mobile devices to access quoting and purchasing applications. Also, customers will look to access policy management and service functionality from anywhere -- particularly important when thinking about claims. It's not hard to imagine claims routing based on mobile devices' GPS features, or a customer uploading a photo from their mobile devices of a damaged vehicle after an accident.

Given the constraints placed on all businesses in the challenging economic climate, we can expect reduced technology budgets for 2009, even though IT will be asked to do more at a much faster pace than ever before. This economic reality will also impact vendors. The constraints on IT department budgets will create more-intense negotiations around price points. IT departments will also be more wary of engaging with vendors, as it's not clear whether some will be around long-term or whether they'll get acquired -- both of which would have negative implications for the service levels desired by IT organizations from vendors.

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