PLM Helps Carriers Walk Development Tightrope
Insurance Networking News, January 2008
Whether you are on the business or IT side, the thought of bringing new insurance products to market is oftentimes fraught with turmoil. Once a company has assessed who needs what product when, why and for how long, the real work begins. Deadlines are established, teams from all areas of the organization are assigned and organized, and the technology backbone that will make meeting those deadlines possible must be shored up.
Along the way, someone in senior management has probably used the terms “speed to market” and “agile enterprise,” making some team leaders shudder—because product development processes for many organizations continue to be highly manual, inefficient and, therefore, expensive.
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To hear Steven Coryell tell it, manual processes affect more than efficiencies and cost. “The lack of a central data repository to house product data or rates rules and forms introduces additional risk from a compliance perspective.”
Although the argument can be made that the development and delivery of new or enhanced personal lines products may involve a large degree of regulatory oversight, all lines of business are affected in some way by a growing spate of state and federal regulation.
In this light, Coryell, a business analyst at CNA, Chicago, learned first-hand over the past two years how important it is to orchestrate the right balance of technology and processes, as he helped craft several new D&O and E&O specialty lines products that CNA expects to roll out this month.
Steven Coryell
“Specialty lines in particular are risks that are constantly evolving—political, economical, legal and, therefore, insurance needs are changing and are changing rapidly,” he says. “In order to meet demand and cover the new risks for those customers, we needed to improve our product lifecycle management (PLM) processes and deliver high-quality, customized products to market faster to satisfy our brokers, agents and policyholders. And we need to do it profitably.”
The competitive landscape for D&O coverage adds more speed-to-market pressure. According to New York-based Advisen, D&O coverage remained the most competitive line of business in the first half of 2007.
Coryell isn’t alone in his quest for customization and quality. Insurance Networking News asked its online readers to identify the most important benefit of using a PLM system. Of the total respondents, 42% stated improved product quality and customization; 39% reported faster time-to-market; 13% said reduced product development costs; and 6% reported reduced distribution costs as the key benefit.
“We are in an era in which customers expect customization,” says Jamie Bisker, global insurance industry leader at Armonk, N.Y.-based IBM. “PLM used to be considered the acronym of the week. But as companies recognize the importance of quality, they are investing in their systems, and they are also investing in their people, saying ‘why not’?”
SEPARATE BUT COLLECTIVE
Mark Gorman understands CNA’s quest to deliver high-quality, customized products, as well as the scale of the insurer’s initiative. Previously in product development at a major carrier, then as a strategic research advisor with Needham, Mass.-based TowerGroup, and now a consultant with Mark Gorman & Assoc., LLC, Minneapolis, he believes success requires a “separate but collective” perspective.
“You can’t ignore the “agility” factor, because it speaks to the need to look at product innovation as separate from product development, which is separate from product deployment,” Gorman says.
Gorman points to the benefits of using PLM tools to overcome unique constraints that are inherent in concept development, analysis and design versus configuration, testing and implementation.
“During development you are taking into account the needs of customers,” Gorman points out. “During deployment, you are focused on being able to process policies and contracts, and do it efficiently to cover overhead. This is where leveraging existing systems is considered, reuse of data is key, and getting stakeholders on the same page is critical to getting the job done.”
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