Insurance News for 4/3/2020
How did you get involved in the insurance industry? It’s a question many people ask, and the answers are often quite similar.
‘I fell into it by chance or circumstance.’
‘Other people in my family work in the business and encouraged me to get involved.’
And depending on the insurance role – this will be different for consumer-facing brokers compared to number-crunching actuaries – ‘I enjoyed studying X at college and thought my skills fit the industry.’
For Lester Pierre (pictured), the new chief technology officer / chief information security officer at Protecdiv, a US-based property/casualty insurance and reinsurance broker, the answer is innovation. Over 28-years in the business, it is innovation, technology and transformation that has piqued Pierre’s interest and resulted in a highly successful career.
During his senior year at New York University, Pierre interned with a firm called U.S. Trust, where he worked on programming and support in the data center. There he learned programming language for the IBM mainframes and the Pick operating system – skills that soon landed him an opportunity at Aetna, where they were looking to develop an agency automation system. He joined a team of around 200 people tasked with designing, programming and building this system, which the health insurance giant hoped would increase speed, efficiency and accuracy for its agent partners.
After that, Pierre worked stints with multiple top financial services firms, such as Citibank and Prudential, always with an eye towards innovation. He most recently spent 11 years as vice president and chief information officer at the reinsurance broker Holborn Corporation, where he was responsible for critical business application support, service delivery, and the development of client facing technology solutions.
“Every opportunity at every insurance firm I’ve worked with has been based around innovation. They were all trying to do something innovative and trying to leverage technology to transact business in a more efficient manner. That has been the key theme throughout my career,” said Pierre. “When I first started out, technology was just being introduced on a broader scale, with the introduction of PCs and so on. So, I’ve grown up with technology from the very beginning, and I’ve had a lot of opportunities to learn how the insurance industry makes the most of innovation.”
The latest chapter in Pierre’s career is with Protecdiv, a tier-one minority-led insurance and reinsurance broker, with a focus on large publicly-traded and privately-held companies, as well as government and government-sponsored entities. As Protecdiv’s technology leader, Pierre has overall responsibility for the development, maintenance, and deployment of all mission critical IT applications, analytics and infrastructure at the brokerage.
“When it comes to technology, you don’t throw out everything that was done in the past because you’ve created or found something new. Rather, you incorporate it,” Pierre told Insurance Business.
“Kael Coleman and Paul Little [the co-founders of Protecdiv] first approached me on a consulting basis to help them launch some new technologies in their business. Since it was 2019, I pitched the idea of being cloud-based and supporting a teleworker or a virtual company. So many industries have leveraged cloud capabilities today and they can have a huge impact on business.
“With all the clichés buzzing around the tech industry, it’s refreshing to have the support from Kael and Paul to incorporate innovation into our processes. We’re going to use the latest and greatest technology if it fits with our business goals, and we’re going to do things to be innovative without changing the fundamentals of insurance. In reinsurance, for example, we still have to get the treaty, and service the cedent and the reinsureds. But if we can find ways to use new tools like the cloud to enable greater efficiency and collaboration, let’s embrace that and let’s make that a differentiator. That’s what attracted me to Protecdiv - the fact that I have this blank canvas to create innovation.”
Source: Insurance Business America 4/3/20 Author: Bethan Moorcraft
Property/casualty insurance carriers embarking on massive projects because “the system is too old” are making one of the most common technology mistakes in the industry, according to an executive of a technology company.
In addition, many insurers make the mistake of putting checklists of desired features on requests for proposals from tech vendors without paying attention to the quality of the providers in delivering on those features, said Michael DeGusta, chief executive officer of ClarionDoor, a cloud SaaS platform for distributing insurance products with rate, quote, bind and issuance capabilities.
DeGusta, who delivered his remarks at the InsurTech NY Spring virtual conference earlier this month, contrasted the RFP process for tech projects to the experience of buying a car. “If you went to buy a car, you wouldn’t say, ‘Oh, this Porsche has an engine, has doors, has a cupholder. But wait, over here, we have a Ford Fiesta [with] an engine, doors, but two cupholders, so it must be better!'”
“That’s not how the real world works. Quality is really what matters more than long checklists,” he said.
Still, DeGusta gave a list of his own—a list of technology mistakes to avoid. “The common thread of all these mistakes…is they don’t really feel like mistakes,” he said, warning attendees not to be surprised if one or more of them was happening at their companies today.
Along the way, he gave suggestions to fix the mistakes as well. For example, after noting that the vendors who win the jobs after an RFP process are often those that are better at “jumping through the hoops” of the RFP processes with hefty documents responding to the carrier checklists, he suggested an alternative. Specifically, he recommended that carriers contact every vendor that might be interested and tell them—concisely—what business problem they are trying to solve. “Give them one hour to make whatever presentation demo they want. Nine times out of 10, it’ll be pretty clear which two or three is worth spending more time with,” he said.
Here’s some of what else DeGusta had to say about the first two common mistakes and a few others.
• If it ain’t broke, don’t fix it. “It’s actually only bad technology if it’s actually stopping you from pursuing your business needs,” he said, noting that an existing system being too old or technology “being generically, amorphously better somehow isn’t justification to spend years and millions of dollars distracting from the real priorities,” DeGusta said. “Companies really need to ask themselves what is the actual business problem you’re trying to solve,” he advised.
• The RFP. Calling RFPs “the most overdone and underthought processes ever created,” DeGusta observed that they take up massive amounts of time for all parties—immediately adding months and months to a project before it even gets off the ground.
Another drawback is that RFPs are written based on what worked in the past. “If you really did do that RFP for a car, it would probably ask questions like, ‘How many cylinders does it have?’ You’d miss the Tesla all together,” he said.
• Five-Year Implementations. DeGusta believes that nothing good happens after 12 months when it comes to technology, and said that any carrier that’s in Year 3 of a five-year implementation is doing something wrong. The fact that companies are making “unnecessarily huge, scary, multiyear technology bets” is what’s causing the slow pace of change in insurance technology. “And then two years in, it’s already a year behind. But at that point everyone’s too invested and too afraid to admit it was a mistake, so people keep pushing ahead.”
• Insurance Companies Aren’t Tech Companies. DeGusta stressed that insurers should focus on their roles of developing innovative insurance products, launching them and managing risk rather than becoming technology companies. “No one tries to write their own spreadsheet app, and now people are finally starting to realize that maybe Amazon is better at managing servers than we all are. We need to keep pushing that attitude further up the stack and making sure we’re enabling insurers to focus just on what makes them different, not on building technical infrastructure,” he said.
Other tech stumbling blocks for insurers that DeGusta touched upon were being attracted to buzzwords (like blockchain proofs of concept at companies that are behind the curve on basic technology projects), trying to find multi-tools that claim to solve all problems at once and neglecting the foundations for API software.
“So much progress has been made in insurance technology, but certain habits seem hard to break—and just keep leading insurers into painful experiences with their systems and their software vendors time and time again,” he said.
Source: Carrier Management 4/3/20 Author: Susanne Sclafane
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