Taking the Canadian Insurance Industry Digital

May 6, 2018 / G C Network / Comments Off

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The Time is Now for 21st Century Leadership

By G C Network | November 10, 2013

I’ve just had the opportunity to preview my good friend Melvin Greer’s newest effort, “21st Century Leadership: Harnessing Innovation, Accelerating Business Success“. Now in pre-release, this book highlights the compelling…

Public Cloud IaaS : A Price/Performance vs. Security Analysis

By G C Network | October 25, 2013

Industry’s transition from custom made, one-of-a-kind IT infrastructures to the standardize, commodity based cloud paradigm is well on it’s way. IBM’s recent “Under Cloud Cover” study highlights the rapidly of…

Catch the Cloud with DorobekINSIDER LIVE!

By G C Network | October 17, 2013

Yesterday I thoroughly enjoyed an opportunity to participate in the DorobekINSIDER LIVE edition on cloud computing. The conversation was both lively and informative. Joining me on the show were:…

Cloud Shines Brightly as Future of Disaster Response IT

By G C Network | September 14, 2013

The call for help began as a rumble. Twenty miles beneath the ocean’s surface, a rupture in a massive tectonic plate ripped a 310 mile-long break in the sea floor,…

NCOIC/NGA Demonstrates Use of Cloud in Disaster Response

By G C Network | September 5, 2013

When the world’s next major earthquake, tsunami or other disaster hits, military, government and civilian NGA project is available on the NCOIC website. responders will need to manage and…

NBC4 Puts On A Great GovCloud Show !!

By G C Network | August 25, 2013

NBC 4 in Washington, DC highlighted government cloud computing today as part of their GovInnovate show. Below is just a taste of the informative public service they provided. Go to…

OMB’s Evidence Memo: A Call for Cloud Services Brokerage

By G C Network | August 21, 2013

by Ray Holloman and Kevin Jackson In a late July memo the Office of Management and Budget requested cloud services brokerage. Well, not in so many words. Rather, OMB requested…

Cloud Services Brokerage Lessons From Alex Rodriguez, Baseball’s Trade Deadline

By G C Network | August 8, 2013

( A guest post from Ray Holloman, NJVC Corporate Communications) Two stories sat atop baseball’s marquee in the final days of July. The first was the non-waiver trade deadline, baseball’s…

Lessons Learned: VA Cloud Email Termination

By G C Network | July 17, 2013

According to a Federal Computer Week article by Frank Konkel, The Department of Veterans Affairs terminated its five-year, $36 million cloud computing contract for email and calendaring services with HP…

Deconstructing Cloud: An Excellent Guide to the Cloud Computing World

By G C Network | July 15, 2013

On an almost daily basis, I’m approach for my views on “cloud computing technology”. Although typically innocent in nature, I always cringe at the thought of enduring yet another hours…

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“Digital disruption isn’t just for hip start-ups. Incumbents can not

only compete but actually lead radical industry change if they pay attention

to the way their business model is shifting and act boldly in response.

–McKinsey & Company

Founded in 1871, Economical Insurance operates within the old and relatively static Property and Casualty (P&C) insurance industry. According to the American Insurance Association (AIA), the modern insurance industry, developed primarily in England after the Great London Fire in 1666. Today, this insurance industry segment protects from risk in two primary areas:

Protection for physical items, such as houses, personal possessions, cars, commercial buildings, and inventory (property); and
Protectionagainst legal liability (casualty).

Property insurance provides for losses related to a policyholder’s person or property while casualty/liability insurance protects a policyholder against the claims of others.

Economical sees itself as the insurance company “For Canadians by Canadians.” They also tout themselves as a company that imagines bigger and better things. Their credo is to focus on the customer first, and this is why Economical is one of this country’s leading and most trusted P&C insurance companies.

With this background and belief, it may come as no surprise that innovative internal thinking led to the conceptualization of a new business model. One targeted to a market segment that was comfortable with advanced technology. They saw these customers as underserved because traditional service channels were not meeting their unique needs. By feeding on a passion and desire to make a difference in everything they do, Economical business and technology teams partnered to build a new channel built entirely on digital processes.

The vision they saw was Sonnet. Launched in 2016 t,his new brand brought an innovative new insurance experience to Canadians who prefer to purchase insurance directly online. Using sophisticated technology and real-time analytics, customers are now able to instantly get customized quotes, purchase a policy, and make account updates online at any time.

The intent was to leverage and aggregate data from multiple sources, apply real-time analytics and provide a unique personalized recommendation based on the customer’s profile. The twin challenges were finding an evolutionary and transformative path that wouldn’t crater the existing business and a savvy business technology partner that wouldn’t waste the company’s time and money. That partner was IBM.

The most critical element in this effort was speed. With time to market being so important, a public cloud-based solution was the answer. The IBM public cloud allowed Economical to deploy quickly, take advantage of automation to reduced errors and enabled business flexibility.

Another key component of this partnership was software development that used the KANBAN Agile Methodology. Kanban is based on three principles:

Visualize what you do today (workflow) to see all development items within context.
Limit the amount of work in progress (WIP) to balance the flow-based approach and prevent team over commitment.
Enhance flow that uses a priority process to pull in development backlog in as soon as a previous task is completed.

When compared to the well know SCRUM model, using KANBAN promoted continuous collaboration and encouraged active, ongoing learning and improvement by defining the best possible team workflow.

Economical pursued a hybrid cloud strategy to leverage the previous enterprise IT service investment. Significant time was therefore spent in the design phase because the right design required decisions on what went in the cloud and what stayed on premise. Those decisions, in turn, drove data flow, security control locations, and any required infrastructure resiliency improvements. The hybrid strategy also brought with it a need to integrate with legacy systems. IBM was able to meet this and associated requirements to partner with other members of Economical’s business ecosystem.

In the end, the key to an on-time launch of Sonnet was primarily teamwork and a real partnership. Sonnet thoroughly disrupted the P&C Insurance market in Canada. It successfully challenged the status quo and demonstrated that digital transformation was possible with the right technology partner. This success has spotlighted Economical as an industry leader and business innovator. Customer reaction has been extremely positive, and the business has been scaling with a healthy and steady growth trajectory.

One of the many lessons learned by Economical during this process was that disruption is not a one-time event. Organizations must continue to re-invent themselves or competition will disrupt you. This new internal operating model has led to new product suites, new offerings, simplified pricing and new internal workflows. The service offerings will be built on top of the infrastructure put in place for Sonnet and will change the way Economical works with their brokers. Although a bi-modal, two speed IT operations model was initially accepted, this next step will use cloud computing to connect cloud-native components to core legacy assets. This “real IT transformation” will use additional efficiency to fund future transformation initiative through a long-term partnership with IBM.