Insurance: Strategic IT Investment Critical to Competitive Edge

Dennis Pfiffner

Senior Vice President Life Operations – Insurance Solutions

StoneRiver, formerly Fiserv Insurance Solutions

Welcome to our forum Dennis. What are your thoughts on the importance of strategic IT investment for insurance carriers during this downturn?

Now is not the time to cut back on key strategic IT initiatives. In my opinion, companies that react to the downturn by freezing their strategic IT spending will lose any competitive advantages they have as their strategic initiatives stagnate. As Matthew Josefowicz suggests, now is the time for carriers to transform their business as they look for future competitive advantages. By implementing more efficient ways of doing business, such as straight-through processing, carriers will be able to obtain efficiencies in the short term as they create the platform for doing business in the future.

What do you think should be the goals right now?

I believe one of the goals that life insurance companies should focus on is utilizing technology to streamline the acquisition and processing of new business. Reducing the time and cost of doing business electronically should be a strategic goal of most carriers. The use of straight-through processing will allow companies to reduce policy acquisition costs and allow them to be more flexible in acquiring business from different distribution channels. As part of the new business process, carriers also need to implement flexible sales platforms so that they can readily adapt to the marketplace as they drive business through to their various distribution channels.

What should carriers avoid doing?

Companies should avoid the temptation of cutting IT funds globally with the intention of weathering today’s economic environment. By not acting on key strategic initiatives, a life insurance company will delay both their ability to move forward in today’s challenging marketplace and place them at a competitive disadvantage in the future. Those that delay their initiatives, in my opinion, will end up playing catch-up to those with more foresight to move forward with their strategic goals.

Any new capabilities that insurance carriers should be excited about?

While straight-through processing is not a new concept, many advancements have occurred in recent years. Products such as LifeSuite provide the ability to automate the underwriting process. Microsoft Web-based tools enable the use of remote underwriters. Web-based sales/illustration platforms have become increasingly flexible in supporting multiple sales channels and product configurations within a single platform. The use of Web services has allowed the leveraging of core components within the various new business platforms. Finally, additional methods of providing services through portable devices are another capability that is starting to gain traction.