Gregory Maciag

Document Factory Runs On Data

Susanne Hale and James Mullarney propose an automated document factory for insurers in Property Casualty 360. They approach insurance operations from the point of view of document assembly and publication. It's an interesting way into the topic of systems architecture. They present an agent-based architecture: that is, they describe a number of collaborating roles like Identifier, Assembler, Distributor and Archiver which could be implemented as software services. The authors note that their factory approach requires standards-based data, and remark that standards are also needed to handle third-party data.

I applaud the idea of reimagining documents as the outputs of business processes. Documents have traditionally been seen as fixed objects that carry data - the document comes first, the data second. I think Hale and Mullarney are flipping this perspective around. In their view, insurers construct documents in order to carry data. Documents are the end product, not the source material.

In the ACORD community, we often argue for standards on the basis of their foundational role in improving business processes. This article makes the same argument but in reverse order. The authors focus on the need for better processes, and conclude that data standards are among the essential requirements.

Transforming Insurance Enterprise

Common and Meaningful

Outgoing federal CIO Vivek Kundra issued 10 key principles for improving IT management. He includes this advice: "Employ common data standards. Think about what would have happened if railroads across the country had used different standards in terms of railroad track gauges."

This is a clear image which gets the main economic point of standards across. But, on its own, it might suggest that any standard will do, so long as it's a standard. Elsewhere in his list, Kundra talks about capturing data once at source, building end-to-end systems and reuse. The unspoken notion that connects all these tips is that data has to represent the business it's meant to inform on.

Workable data standards successfully model the business domains they serve. A one-inch gauge - or a one-mile gauge - would have been no use to the railroad industry.  Federal Computer Week

Islands v Integration

During the 1980’s, each piece of software was an independent product. Spreadsheet, email and word processing were self-contained.  Later, a few vendors attempted to combine all sorts of functionality into a single product, but the whole became less than the sum of its parts.  Basically, buying a single software product that was the “be all end all” was doomed.  Today, we have a few suites of related products from single vendors.  We enjoy the integration and accept the limitations and lack of innovation that can result.  So we end up with “add-on” products from other vendors.

The insurance industry is very complex and keeping a single source of truth across all systems is extremely difficult.  It seems unreasonable to me that anyone can expect a single vendor to provide every single solution or innovation to brokers and insurers.  All vendors (who are honest with you) will admit that the name of the game is to integrate with other software products.  They cannot be experts in every facet of the insurance business. 

When you buy a stereo system for your home or any technology product for that matter, one of your main concerns is that it will work with whatever else you have installed.  This is where industry standards come into play. When vendors agree to become ACORD Standards compliant, they look to a future where they can provide great products but are also open to integration with other vendor products.

We are on the cusp of a plug and play insurance world, as we broaden the base of insurance data standards, but we are not there yet.  The 1980’s notion that a single vendor is all that a broker or insurer will ever need is not a forward thinking view.  It’s all about open industry standards for integrating disparate insurance systems.  If the broker has the “Truth”, the broker system needs to be able to spread it to other systems, platforms, portals and mobile devices across the value chain.  Open industry standards that cross boundaries allow information to flow when and where it’s needed without ever having to be re-keyed into a system.

Cloud Futures

The IEEE is leading efforts to create interoperability standards for cloud computing. CIO Alexander Pasik has also been thinking about how businesses should deal with their concerns about cloud security, and sharing his thoughts with InformationWeek. He says that one of the reasons why customers are happy to let banks handle their money, rather than keeping it under the mattress, is that bank deposits are insured. Pasik suggests that cloud providers should offer similar security against a data breach.

 As I've noted elsewhere, the cyberinsurance market is heating up. I agree with Pasik's analysis, and I particularly like this statement: "Security can't be guaranteed, but it can be insured."

But I have issue with a statement made elsewhere in the article - and not, I hasten to say, attributed to Pasik. This is the idea that "the damage done by a security breach usually can be quantified financially so enterprises that suffer one could still be compensated". The word I'm picky about is "usually".

I've been reading Douglas W. Hubbard's book How To Measure Anything, and it's made me hypersensitive to claims that there are unmeasurables in business. Hubbard would change that "usually" to "always". If the damage can't be quantified financially, then it isn't damage. And, as Hubbard mentions in the book, insurance is all about quantifying intangibles - putting a value on abstract things, and putting a price on potential events.

On a different tack, perhaps cloud providers should look at the other reasons why customers trust banks. Isn't a big reason that the banks provide services among themselves that customers could not afford to perform for themselves? Life would grind to a halt without the national and global payment systems. And then there's the payment of interest.

What could cloud providers do to emulate these banking benefits? They could imitate banking payment systems by offering to ship data securely between parties on scheduled dates. They could add more value by brokering collaborative processes between their users, so that, for example, an electronics retailer and an insurer could work together to sell breakdown cover without the need for any systems integration by either party.

Cloud providers could even replicate the concept of interest by "paying" their customers with anonymized, aggregated usage data culled from across the cloud's total activities. All of these measures would require a substantial change in service relationships - but all industries have to evolve if they're to survive and thrive.

 Cloud Insurance

Standards-Free Folly

Brian Dunham of CMIO magazine calls my attention to a what will undoubtedly lead to a costly and messy IT failure in the health sector: a failure to agree standards for patient records. Read this, and weep:

Despite the lack of a clear and specific meaningful use (MU) definition of “interoperability,” [Bridget A. Moorman of BMoorman Consulting] said the expected American Reinvestment and Recovery Act's (ARRA) Stage 1 date for device interoperability is 2015. Identified in the legislation, hospitals must be able to electronically chart three vital signs, Moorman said: blood pressure, height and weight. Interestingly, the law does not specify that information must be integrated electronically. Therefore, it could even be typed into a computer, she said.

While there is money tied to the MU legislation, she noted that the vague wording may be with regard to definitions and standards.  “Stage 1 incentivizes clinicians to purchase EMRs [Electronic Medical Records],” she said. “Even though there was a lot of background work to create the MU requirements, they, unfortunately, did not specify data standards. While you’re not required to have a fully electronic organization under those standards, MU might present an opportunity to begin your device integration journey.”

 Interoperability

Mobil App World Widens

The always reliable and informative Insurance Networking News discusses a report from IDC about the impact of in-app purchasing. The market for apps continues its impressive growth, but the focus of this report is on the opportunities for sales and services that are initiated and completed from inside of running apps.

 I'm not 100% sure of the focus for insurers here. This quote from IDC’s Scott Ellison doesn't help any: “The user sustainability trifecta of social networking, location, and the cloud are now increasingly being supported by the business model financial trifecta of application store purchases, in-app purchasing, and in-app advertising.”

My guess is that the interesting opportunities for insurers lie in collaborative efforts with other providers of products and services. There must be enormous potential for an insurer to insert itself in, say, the process of buying an expensive, complex item. An app that helps you choose a vacation could feature a prompt for buying travel insurance, with the premium being shared by the insurer and the app host.

This doesn't sound a whole lot different than traditional sales partnerships. Travel companies and insurers already team up in this way. The difference that in-app service could bring is a greater degree of flexibility on the part of the partners. You could even call it the promise of promiscuity. The travel app host could switch its in-app insurance provider with a simple change to the call-out code.

This business switchability is a free by-product of the fact that for in-app services to have any hope of gaining traction, they have to be standards-based. The standard discussed in Pat Speer's INN article is Apple's Store Kit framework, so the assumption at work here is that Apple owns the market for apps. With Android growing strongly, developers will want to look at alternative technical standards as well.

The good news is that at the level of business logic - the code that performs the actual insurance process - standards are already in place. ACORD standards can be used as easily in-app as anywhere else. This is just one more area where the insurance community's investment in our standards contnues its rich payback.

 Insurance Networking News

Cloud Roundtable

Thanks to Judy Haddad for mentioning, in Insurance Technology, her experience on our recent CIO panel. Here's the piece, as repeated in Information Week: "It's important to get the topic [of cloud computing] out there for other CIOs," says Judy Haddad, CIO and CTO for Fort Lauderdale, Fla.-based Patriot National Insurance Group (about $200 million in premium).

She said "From my perspective, I like to see what other people are doing. That leads me to say, 'What else can we do?'" Haddad says she learned a lot about what's possible in the cloud from a roundtable discussion she had with other CIOs at the recent ACORD LOMA Insurance Systems Forum. She notes that she had been thinking about leveraging the cloud only for disaster recovery but found that many of her peers also were running utility apps such as email in the cloud.  4 Critical Questions About the Cloud

Business Architecture

Jeff Scott at Forrester notes that interest in business architecture at enterprises remains high but delivery is stagnant. The main reason given by survey respondents for the stasis is a lack of interest or support from the business. Scott reckons business architects have to show benefits at the project level and then sell up.

I'm not sure whether Scott is just reporting this behavior, or is recommending it as an approach. For sure, business architects tend to be evangelists, and are keen to demonstrate tangible benefits of architecture rather than appeal to abtract benefits.

However, I don't think we should give up seeking business leadership for business architecture issues. Attitudes to technology are shifting on what we still call the "business" side. Computing has been domesticated and we all tote unprecedented connectivity in our pockets. More importantly, business decision makers are acutely aware that understanding and engaging customers is key to survival and growth. The task for evangelists is to get their business colleagues to see that technology has an answer for the business question - and that the answer happens to be called architecture. The time is ripe.

Action Stagnant on Biz Architecture

Myths of Big Data

Amaresh Tripathy dispatches three myths about big data or analytics. One of the myths he busts is the idea that keeping all your data is automatically a good idea - a message I agree with wholeheartedly.

Another of Tripathy's myths is the assumption that the more data you have, the more patterns you will see, and the more insights you will have. This is very much the leading unchallenged assumption about big data. Tripathy buys this as a general argument about data, but says that in business it's more important to ask the right questions. I'd tweak this line of reasoning slightly. If you ask the right questions, then statistically a small sample can be just as effective as a large one - but that's a minor quibble. I applaud Tripathy's appeal to intelligence in data analysis. There are no shortcuts to insight. Data Myths

A Hard Trend

Dan Burrus has been a speaker at ACORD and with the IIABA on several occassions and he publishes a newslettter that he shares with clients.  I recived this issues from, Jeff Yates (ACT). Jeff says, "I think you will enjoy Daniel Burrus’s latest newsletter. He reminds us that technology-driven business process transformation is a hard trend—it will happen and is happening now. He adds that in this environment the only way to achieve stability is by embracing change as a “continuous and permanent state.”  He adds some great food for thought for all of us.  This is not a time when we can rest on our laurels, do what we have always done and expect to thrive, even if we do our best to keep doing it better." 

Burrus adds that even change itself has changed: “Information and new knowledge now travel around the world at the speed of light, and technological innovation proceeds at close to the speed of light.”  He urges us to ask ourselves whether our customers are learning and changing faster than we are and whether we are designing the solutions now that will meet their future needs.   Download Burrus Research

Certificates of Insurance

Certificates of Insurance are critical to our business and provide information needed by policyholders.  According to ProperttCasualty360. "One consultant estimates the cost to issue a plain-vanilla ACORD 25 document at $7; and if some customization is required, it could be as much as $15-18. This figure could go even higher when responding to requests that insist upon the completion of some sort of “compliance checklist” that consists of dozens of broad, vague, generalized questions about policy coverages."

Please visit the ACORD website to view the latest forms and be sure that your software includes the latest updates. ACORD Forms

Bill Wilson goes on to say that "The costs associated with certificates of insurance are not trivial, whether you’re considering operational expenses or potential E&O claims. To learn more about risk managing your certificates-of-insurance exposure, visit the Big “I” Virtual University’s free Certificate Resource Center at www.iiaba.net/VU.

And read the entire story at PropertyCasualty360

Ease of Doing Business

PropertyCasualty360 ran a story on one of my favorite topics and what CNA is doing about it.  Agents work with many carriers and technology can be frustrating at times as you can imagine. Of course, this is the reason why they created ACORD many years ago and why firms like CNA work with us..   

Robert reports that "Personal lines carriers and their commercial lines counterparts have at least one thing in common when dealing with independent agents: It is absolutely critical for carriers to offer solutions that make it easy for agencies to place business.

Belen Tokarski of CNA said "We can be more personal and have conversations with the agents, but it’s going to take a paradigm shift for the industry to get out of the world of working directly in carrier websites,” she says. By giving agents a taste of what technology can do with ACORD XML, we are slowly moving them up the spectrum until they are in the high end of technical adoption; but, you can’t force real-time quoting. They have to get interested themselves.” READ MORE from Robert Regis Hyle

Data Discipline

Here's an interesting sideline on data management in the cloud era. Commenting on data security issues, Wong Loke Yeow of Hewlett-Packard ArcSight notes that companies sometimes lose data that they shouldn't have stored in the first place: "Organizations should relook [at] data retention practices and processes to ensure sensitive third-party records are stored on transient system and conduits".

It's apparently cheaper and easier for companies to keep data rather than purge it. Similarly, it's easier and cheaper to store unstructured data than to tag it. Organizations are in danger of becoming data landfill sites. This is a dangerous strategy, because you're accountable for everything you keep. Companies need to rediscover data discipline.  Configuration Oversights

Analytics Definitions

Meta Brown defines the key terms in the data analytics area in a short piece for Smart Data Collective. Want to know what the difference is between "analysis" and "analytics"? "Analytics" implies there's some math involved. And when is "data mining" more than just sales-speak? Read the article to find out.

 Data Mining Fundamentals

Unlimited Data

Mobile phone networks are calling time on unlimited data usage by their subscribers. The reason is that they can't cope with the demand. Having converted us all to the benefits of mobile data, they now have to choke us. It's all that video we're consuming. According to Cisco, while a year ago 1% of customers were generating 30% of mobile data traffic, today their share has dropped to 20%. With volumes growing fast, this means that more of us are using more data.

Pricing data usage is one way of dealing with demand. The other weapon is to increase capacity. I believe we'll see a cyclical effect in networks' attitudes to data as waves of technological development roll in. Over the long term, we'll see eras of unlimited use alternating with charging structures. But since the different networks won't be synchronized in their developments, we will also see variability in market leadership. This is likely to further erode customer loyalty as people switch to the current best provider.

The constant amid all this turmoil will be the growing demand for data anytime, anyplace. That genie is out of the bottle. Unlimited Data   

ACT Highlights Key Industry Topics

If you are not involved with the Agent's Council On Technology, visit their website and get connected.  They are part of the IIABA (Indepdendent Insurance Agents & Brokers of America).  ACT Website Jeff Yates is the Executive Director of ACT. 

At the May ACT meeting, they had a series of ten break-out sessions with each asked to focus on particular issue, opportunity or problem facing our industry. The subjects covered were: The Agency of the Future Mobile Device Functionality for Agents in the Field, Mobile Applications for Agency Clients, Impact of New Technologies on Current Industry Approaches, Reinventing Certificates of Insurance, The Opportunity with Federated Identity Management,  Improving Current Industry Processes,   Reducing the Time Needed to Check Commercial Lines Policies & Downloads,  Agency Needs for Business Intelligence from their Systems,  Increasing Implementation of ACT Recommendations

Download ACT Report on Breakout Topics May 2011

   

Measuring Workflow Benefits

Stewart Gibson, CIO for USI Insurance Services, shares some revealing metrics gathered during implementation of standardized workflow. Gibson used a control group who hadn't yet got the software to compare productivity among the rolled-out offices. Diary notes were the target measure.

 USI found that in the control group, diary notes were up 7% on the year. In the offices with the new workflow system, diary notes were down by 70% over the same time period. That's a lot of rekeying consigned to the trashcan. Each diary note may only take a short time to record, but it all adds up. Gibson reckons the saving across the company is between four and five man-years' worth of time. That's without taking into account the potential time and money saved from miskeying of data.

 Nancy Doucette

Words Worth

"Insurance" is the most expensive word in the world. At least, it's the most expensive word an advertiser can buy on Google. When a user searches on any term including "insurance", they are shown a relevant ad and, if they click on it, the advertiser pays Google $54.91. The top queries include "auto insurance price quotes," "car automobile insurance," "building contents insurance," "buy car insurance online," and "life insurance comparison quotes".

 The next most expensive AdWords are "loans", "mortgage" and "attorney". And the rest of the top twenty: "credit", "lawyer", "donate", "degree", "hosting", "claim", "conference call", "trading", "software", "recovery", "transfer", "gas/electricity", "classes", "rehab", "treatment" and "cord blood". Plenty in there to interest insurers.

 The Atlantic

Who's Running Who?

Have you recently received an email auto-reply saying: I'm currently on business trip with limited access to e-mail? These days, it’s hard to imagine where in the world you must go in order to secure limited access to email. What the message really means is something like “I don’t have time now; I’m seeing someone face-to-face! The point is that technology now enables us to be connected all the time – from BlackBerries and ultra-portable iPads to Wi-Fi and 4G. Indeed, we no longer hear much talk about being on-line or off-line anymore. Unless on long-haul flights (so far), the reality of today is that most knowledge workers can be reached more or less 24/7.   Read More From IMD