insurance in the cloud - an agile approach to innovation

Insurance in the Cloud An Agile Approach to InnovationBy Randy Rodriguez, Managing Director, Bluewolf

The AgileEnterprise

2

The AgileEnterprise

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executive summary

As insurance companies enter a new

“dynamic” marketplace where decisions

are made on value in addition to cost,

insurers are putting resources towards

building consumer confidence, driving agent

loyalty, and improving business insight and

productivity. Companies that are able to

effectively capture discriminating consumers

will be the ones to lead the race towards

growth in this new economy. The challenges

to winning that race, including consolidation

and commoditization, can be overcome with

the right strategy.

A combination of leadership and vision,

cloud technology, and a method to execute

can boost an insurer’s strategy for driving

growth and profitability. Agile Business

Transformation leverages a new way

of implementing business process and

technology changes, resulting in the rapid

evolution and adoption of flexible technology

that can improve productivity, business

insight, and accountability. In this paper,

we will look at this new strategic approach

in detail and outline how Agile Business

Transformation, when combined with

mature cloud-based technologies, enables

insurance companies to respond faster to

customers, adapt to changes in the industry,

and gain a competitive edge.

introduction

Forward-thinking organizations see this

economy as a window of opportunity, and

are looking to update both their internal

processes and their technology in order

to provide a foundation for growth. Enter

cloud computing. Rather than “ripping

and replacing” existing and/or legacy

technologies, insurers can look to augment

what is already in place to speed the rate

of innovation. Cloud technology that is

low-cost, low-risk, and quick to deploy is

needed to alleviate the complexity insurance

IT departments typically associate with

any change management initiative. Mature

cloud platforms such as Force.com &

Salesforce CRM can enable intimate customer

interaction, drive quality and efficiency in

the sales process (either directly or indirectly

through brokers and agents), and speed time

to market for new products and services

needed by insurance executives to seize this

opportunity and position their companies

ahead of the competition.

Additionally, insurance companies can no

longer sustain long, drawn-out technology

projects with huge upfront costs that often

What is Cloud Computing?

Rather than running business

applications internally—along

with the IT infrastructure and

technical expertise needed

to support them—companies

can access these applications

via the Internet. The servers,

storage, technical expertise, and

upgrades are the responsibility

of the provider.

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“Insurance companies are having to change what products they offer and how they touch customers in order to make sure that all customer touchpoints are convenient, integrated, and provide intimate customer service.”Kimberly Harris-Ferrante

VP Distinguished Analyst

Gartner from The Right Answer for Right Now: Why Insurance Firms are Moving to the Cloud

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At a GlanceAn Agile approach to business

innovation involves a cultural shift for

companies, from change avoidance

to change acceptance. Without a

supporting internal culture, companies

will have difficulty executing an Agile

development project. Key internal

beliefs needed to support Agile

development include these items.

bring business to a halt. Executives and

IT are reassessing traditional methods

of deploying new technology, and Agile

Business Transformation is a new paradigm

to implement and sustain the value of

cloud based technology. An Agile approach

focuses on iterative enhancements. This

methodology helps insurance companies

integrate cloud computing with existing

on-premise technology for innovation in

customer-facing processes, such as sales

and service, to improve customer interaction,

drive agent loyalty, quality and efficiency,

and speed time to market. Agile Business

Transformation is about transforming

business, combining new processes, flexible

technology, and improving incrementally—

with the long-term goal to constantly hone

all aspects of the business to increase

efficiency and effectiveness.

the foundation for growth in the insurance industry

Commoditization and consolidation are

among the major challenges insurers need

to overcome. A foundation for growth in

face of these challenges is innovation.

Innovation enables organizations to

stand out amongst a sea of competitors.

Leveraging cloud technology and process

innovation, organizations can bring together

legacy, on-premise based systems, with

cloud-based systems that by their nature

are more collaborative, effective, and

successful at serving their customers.

The result is the ability to:

Boost Consumer Confidence: By giving

consumers multiple channels including

self-service, call center, mobile devices,

and social networks. Increasing

responsiveness to consumer requests.

Drive Sales Efficiency and Effectiveness: By

capturing opportunities quickly, responding to

a potential customer, broker, or agent needs

before the competition, and ensuring that

the process continually moves opportunities

through the sales pipeline to close.

Quickly Introduce New Products and

Services: By offering flexibility in policy

terms, customized options, and designing

services to meet individual customer

needs faster than the competition. This

increases value to the consumer, at the

same time maintaining or even reducing an

organization’s overall infrastructure.

Agile Business Transformation – A Cultural Shift

1) A leadership shift that recognizes projects do not end or “go live”, but must continue to evolve as the business changes.

2) A method to execute. Agile development involves a shift from an individual/task oriented approach, to a team approach that involves stakeholders from across the business.

3) A plan for managing changes, or sustaining innovation over time. Since projects do not end, companies need to appoint resources to respond to changes ongoing.

“Leaders who want to become more agile need to lead a cultural revolution.”Matthew Hotle, VP

Distinguished Analyst & David

Norton, Research Director

Gartner from The Cultural Transition to Agile Methods: From ‘Me’ to ‘We’










an agile approach to innovation

An agile approach to innovation brings

it all together. First, Agile Business

Transformation establishes leadership and

vision within a company that recognizes

the need for continual improvement.

Second, by integrating cloud technology

into your business process, along with a

proven method to execute within a given

organization, companies can support new

ways to share information. Third, this

allows companies the ability to plan for and

manage ongoing change while sustaining

their innovative edge in the marketplace.

The key to this approach is incremental

improvement through iteration so as not

to interfere with business itself. Value and

acceptance of the new technology is gained

quickly while reducing the IT footprint, in

turn, reducing capital expenditures. People

can be reallocated to focus on strategy in

day-to-day operations, and transformation

is achieved faster and for less cost. Finally,

Agile Business Transformation seeks to

continually refine and hone processes

as business dictates, driving higher value

to the organization.

Specific business processes in the insurance

industry are ideally suited for Agile Business

Transformation. These include:

1. broker/agent management

Insurance companies that work through

distributors or brokers are not as close to

the consumer. They need to be proactive

with these intermediaries to ensure that

their products and services get in front

of the consumer first. At the same time,

distributors and brokers are asking carriers

to be easier to work with; this means getting

more information to brokers and connecting

them to the enterprise.

Case Study One: Hanover Insurance Group, Inc.challenge

Hanover used a combination of legacy

systems along with manual processes that

did not integrate with each other. This added

to their time per call and limited their full

knowledge of both customers and broker

agencies. They needed a more intuitive way

to manage the complex and strategic nature

of their broker and agent relationships.

There was limited activity reporting, which is

essential to effectively managing channels

and organizing broker productivity. Hanover

was also looking to streamline access to

monthly actuals for both individual brokers

and across the board.

strategy

Salesforce CRM and Agile Business

Transformation: Integration to back-end

systems with partnering agent information,

campaign functionality to target agents for

certain initiatives, revenue management,

and policy organization.










results

Eliminated extra work required to get

information from disparate systems

Provided a comprehensive view on broker

calls and productivity

Enabled brokers to focus efforts on

building agent relationships

2. service & support: cross selling/upselling

Service and support is not only responding

to customer problems and solving them, it

is also an opportunity to drive more revenue.

Cross and up-selling opportunities can often

be missed without the right processes and

technology in place, which allow companies

to offer the best-suited products and

services to the right customers.

Case Study Two: Hanover Insurance Group, Inc.challenge

Hanover’s business is generated through

independent insurance agencies located

throughout 18 states. Increasing product

share from independent insurance agents

is one of Hanover’s primary objectives.

Once a policy is sold, brokers can either

service the policy themselves or they can

outsource it back to Hanover. Hanover

created a service center so agents could sign

up for service, but had no system to handle

these specialized support calls. The company

also wanted to increase incremental

selling through its service centers, but

needed to understand individual state and

broker restrictions to define what was

eligible for cross selling.

strategy


Transformation: Workbench built on flexible

technology to support cross and up-selling.

results

Reduced the amount of systems call

center agents needed to access from 6

to 2 to get a full view of the consumer/

broker relationship

Improved insight: Employees can view all

policy restrictions for a better idea of what

to recommend for cross-and up-selling

Reduced support call time by 40%,

creating more revenue-generating time

with customers

3. sales & support: contact center management

Contact centers represent the most direct

line to the customer. Enhancing a call

center and arming employees with the

technology and solutions (templates, scripts,

information access) to properly manage and

route customers through the sales process

is critical. Cloud computing can offer distinct

advantages to effectively process inquiries

and help reduce response times.










Case Study Three: A Leading Health Care Provider in the Southeastern U.S.challenge

The main challenge was to manage 30,000

inbound calls per month and get visibility

into how sales activities were being handled

through the call center. The company wanted

to tailor agents’ call scripts to each caller based

on recognized demographics and history.

strategy


Transformation: Call center integration,

call scripting, and policy organization.

results

Ability to efficiently manage call activity

and close business on a large volume of

monthly business

4. operations

Insurance companies can improve cross

functional collaboration and productivity

with a tailored solution focused on the

specific needs of managing complex

policies. A comprehensive end-to-end

solution enables companies to centralize

data in one location, replacing homegrown

systems with a single real-time data center.

This gives companies improved visibility,

management and control over ongoing policy

approvals, renewals and changes. Insurance

companies can also:

Calculate and handle commission splits

among several parties

Automatically generate RFPs, quotes,

policies, and renewals

Increase policy collaboration for improved

accuracy and response

Easily integrate policy information with

your back office ERP system

smart innovation with Salesforce.com

Insurance carriers and intermediaries

are navigating difficult market conditions.

Fortunately, smart technology choices can

help insurers adapt quickly to this ever-

changing environment and build agility

into the enterprise.

Companies of all size—from the

largest global carriers and brokers to

local, independent agents—have turned

to Salesforce CRM insurance industry

solutions and the Force.com platform.

Benefits of transitioning key insurance

processes to the cloud include:

Improved Sales and Service Process:

Coordinate every touchpoint, from inquiry

to policy to renewal. Sales reps, brokers,

and service representatives now have a

360-degree customer view and insight into

customer needs. The result: capture cross-

sell opportunities and build customers for life.










Tighter Alignment With Customers,

Brokers, and Agents: Integrated CRM and

Web 2.0 portals foster real-time collaboration

and allow insurers to better service their

distribution partners. That makes insurers

easier to work with, driving agent and broker

productivity and loyalty.

Streamlined Development: Cloud computing

solutions make it easy for insurance

companies to build powerful custom apps, all

without software, hardware, or the up-front

investments and long implementations of

traditional on-premises software. This lets

insurers focus valuable resources on their

core business.

Simplicity of Integration: The Force.com

platform simplifies integration to back-office

systems like underwriting and billing, as well

as third-party tools. All business-critical

information can be right at your fingertips

anywhere, anytime.

Flexibility to Change: As your business needs

evolve, the Force.com platform provides

ultimate flexibility to customize your

system or even quickly build new custom

applications.

summary

Insurance companies are looking at

the “new” economics of the market and

are realizing that the keys to growth

and profitability are adaptability and

responsiveness. Increasingly, these

companies are looking at flexible technology

or cloud computing for innovation. Along

with new technology, insurance IT leaders

are rethinking traditional methods of

deploying new applications and processes.

Agile Business Transformation and cloud

computing together provide the means to

gain the most value from existing and new

technology to evolve and make their mark

on the new world of business.

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about us >

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enterprise agility. We partner with clients to

sync business and IT to create a new level of

business responsiveness. From cloud enabled

customer life cycle innovation, to IT staffing,

to agile managed services, Bluewolf knows

how to get your business to the next level of

innovation. Our clients include Time Warner

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