The recent Datos Insights CIO Council Meeting in Boston brought together senior IT leaders from various insurance carriers to discuss core implementation strategies. Sessions included an engaging roundtable discussion with IT leaders from carriers at different stages of their core system implementation journeys, each facing unique challenges and opportunities.
I also hosted a breakout session on core implementation strategies, where attendees discussed the various phases of the core systems implementation process, from discovery to operationalization to volume growth on the new platform to shutting down the legacy platform.
Each of these stages includes its own challenges, so it’s important to have a roadmap to ensure success. Group discussions like these are a key way Datos helps clients in exchanging best practices and learning from the experience of peers.
In the discovery phase, carriers are evaluating the benefits, options, and value of modern platforms. As they move into contracting, carriers are signing agreements with modern platform providers and reviewing system integrators to determine whether these services should be utilized.
The early implementation phase involves critical decisions about which products to implement and how many to start with. Carriers must consider factors such as financial justification, speed to market, and the ability to integrate with external products or systems. Some carriers are also evaluating whether to build product calculations within the new platform or use external tools like Coherent’s XLS tool or a calculation API. This can be determined by complexity of the product calculations and/or the best internal processes to maximize throughput and customer experience.
Carriers who have completed initial launch must then consider how to scale and determine the next product to add to the platform. Carriers with multiple products on the platform are deciding whether to convert old blocks of business. Throughout the implementation process, carriers emphasize the importance of having clear goals and metrics that can be tracked, such as speed to market, cost per policy, number of integration points, cost of implementing enhancements, and the ability to release independently from the ecosystem.
The operationalization phase presents its own set of challenges, with carriers focusing on how to get the most out of their SaaS solutions. This phase requires a blend of legacy knowledge and modern skillsets, as well as a clear definition of roles for various areas within the organization. Carriers must also ensure that the product can be configured by the appropriate teams or the teams that have the right skillsets and best reduce the time to market.
Finally, carriers discussed the process of sunsetting legacy platforms once all policies have been migrated to the new platform. This phase represents the culmination of the implementation journey and allows carriers to fully realize the benefits of their modern platform, such as improved speed to market, reduced cost per policy, and simplified ecosystem integration.
Outside of the session, many conversations centered on the importance of having an exit plan in place before implementing a new modern platform. Attendees expressed a desire to avoid the mistakes made with legacy platforms that have proven difficult to replace, emphasizing that any new platform should be designed with the ability to be replaced without the same level of effort and complexity.
CIOs sizing up core system transformation don’t have to go it alone. Our CIO Council Meeting provided valuable insights into the challenges and opportunities facing insurance carriers as they navigate the various phases of core system implementation. By considering factors such as exit strategy, financial justification, clear goals and metrics, broad acceptance, product strategy, and the separation of implementation and production support, carriers can position themselves for success in their modernization efforts.
