6 Questions for Origami Risk’s Chris Bennett on Risk Management Tech Advancements

Technology is one of the biggest enablers in risk management. But just keeping pace with the latest and greatest systems, not to mention handling vast amounts of data on a daily basis, can be a daunting task.

Chris Bennett, president of Core Solutions, Origami Risk, spoke to Risk & Insurance® about the challenges involved in replacing legacy systems and staying abreast of the latest technological innovations. What follows is a transcription of that conversation, edited for length and clarity.

Risk & Insurance: What are the biggest challenges involved in managing, modernizing and connecting legacy systems in the risk management industry?

Chris Bennett: Insurers and brokers continuing to rely on legacy systems find themselves with a growing number of disadvantages as they try to compete with faster, leaner and more efficient Insurtechs. For starters, server-based legacy systems are costly to maintain and update.

While true single-instance, multi-tenant software as a service (SaaS) systems provide instantaneous and continuous upgrades, implementing software updates in a legacy system — even those that are hosted in the cloud — typically involves a more manual process with IT involvement.

Data maintained in legacy systems is often siloed, and it can be difficult for systems to accept new inputs or conduct focused analytics — such as what may be needed for more efficient, accurate and faster underwriting decisions, better claims management and related customer services.

There are also significant delays and challenges associated with implementing new solutions. Rather than integrating seamlessly with new and advanced capabilities, tools and resources, technology-based analytical services may need to be outsourced. Consequently, data inputs and information outputs may be delayed as they are transferred back and forth through email.

R&I: What are the chief concerns of brokers and carriers when it comes to investing in and implementing new technology?

CB: Once insurers and brokers complete a thorough assessment of their technology capabilities, the competitive landscape, and their immediate and future needs, they typically understand and appreciate the costs and benefits of investing in new core systems.

Their key concerns then become how fast the new system can be implemented and what it will take for their staff to get fully up to speed. Those are keys to how quickly they’ll be able to realize the system’s full return on investment (ROI).

With respect to their technology solution provider, they want to know what kind of support they can expect during the implementation period and beyond. How much training will be needed, who needs to receive it, and how will it be delivered?

In this rapidly changing environment, insurers and brokers also are concerned about system versatility. How quickly can tools and capabilities be adjusted to accommodate new lines of business, policy endorsements, and features and compliance requirements? If they’re growing through mergers and acquisitions, they’ll want to know how readily data elements can be integrated from new business combinations.

R&I: What are the main pitfalls to look for when choosing a technology provider, including data ownership?

CB: A major pitfall is being shortsighted in your technology planning and needs analysis. In this environment, consider carefully not only your immediate needs but also the future direction of your business — and how your technology requirements may evolve over time.

On an immediate basis, you’ll want to assess the ability to migrate data from your legacy system to the new one. That will affect how quickly the implementation of the new system will be completed — and how fast you’ll fully realize the anticipated ROI.

You’ll also need to assess your technology provider carefully. Do they have a demonstrated track record of delivering results? What about their financial strength — will they be there for you in the long run?

Another key consideration is the frequency of their platform updates. You want a system that regularly innovates for customers and pushes out a steady flow of enhancements. Some system architectures (such as multi-tenant SaaS) make this easier to accomplish.

You’ll also want to ascertain where your data will reside and who owns it. Does the technology provider leverage servers outside your country that may be subject to security and compliance requirements?

You’ll also need to be aware that providers that have grown though acquisition may have “Frankenstein” systems incapable of unifying data as a single source.

R&I: How does investment in technology enable brokers and carriers to improve speed of access to data, better facilitate analytics, support decision-making, drive efficiency and stay ahead of the competition?

CB: Investment in cloud-based core technology solutions dramatically reduces data silos. That alone enables brokers and insurers to access the big picture and connect the dots across otherwise discrete data sets. It also supports the seamless integration of artificial intelligence-based solutions that drive better analytics, enable workflow automation, increase speed and accuracy, and enhance customer service.

R&I: How can they keep up with the latest advances in risk management technology and ensure they have the right systems and software in place to remain up to date through the use of SaaS technology and multi-tenant systems?

CB: In addition to meeting directly with technology solution providers and attending industry conferences, most carrier CIOs and CTOs receive industry reports issued regularly by analysts. As they plan core system upgrades, they should keep abreast of the latest developments.

These resources will help gain an objective view of the strengths and weaknesses of potential providers. They may also help insurers and brokers in evaluating their technology resource needs and objectives.

When meeting with technology providers, they should drill down on the system’s scalability, security, enhanced data capabilities and versatility in driving speed to value. Check the system’s track record of innovation and ability to respond to dynamic changes in the marketplace. For example, they might explore how systems helped insurers and brokers address the impact of COVID-19 on their operations. Was remote or mobile access available to facilitate uninterrupted operations when offices were closed or operated with limited personnel?

R&I: How can they successfully achieve this without breaking the bank?

CB: One option to keep costs under control and recognize speed to value while transitioning to SaaS multi-tenant systems is to adopt a phased-in approach. For instance, the implementation might focus on certain lines of coverage or functionality, such as policy administration or claims, and expand on a programmed basis over time.

Thus, critical functions can be addressed on a priority basis, and the transition can be accomplished with investment funds spread out.

In evaluating investments in state-of-the-art technology, insurers and brokers must also be realistic about the opportunity costs of the status quo. They may lose business to traditional competitors that implement new technology or to leaner Insurtechs. &