Taking the Canadian Insurance Industry Digital

May 6, 2018 / G C Network / Comments Off

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Cloud Computing as a Strategic Asset

By G C Network | April 30, 2009

For some reason, this week seems to have more in it than most. While the steady stream of briefing request seem to be increasing, the post briefing discussions also seem…

Vivek Kundra: “Engage the American People in their Daily Digital Lives”

By G C Network | April 25, 2009

Today I attended a very impressive talk by the Federal CIO, Mr. Vivek Kundra at a Northern Virginia Technology Council Public Policy event. His open and “matter of fact” approach…

McKinsey vs. Booz Allen Hamilton !

By G C Network | April 21, 2009

A community skirmish reminiscent of the recent “manifestogate” has apparently erupted around the McKinsey & Co. report “Clearing the air on cloud computing“. Booz Allen Hamilton Principals Mike Cameron and…

Oracle Buys Sun!!

By G C Network | April 20, 2009

Swooping in from nowhere, Oracle buys Sun for $7.4B!! “This morning, the companies announced that they’d struck a deal worth $7.4 billion or $5.6 billion net of Sun’s cash and…

Aneesh Chopra Nominated For Federal CTO

By G C Network | April 20, 2009

Although Aneesh Chopra is a new name for most, he is well know in Virginia as Governor Tim Kaine’s Secretary of Technology. For the Commonwealth, he was charged with leading…

Could Cloud Computing Cost More?

By G C Network | April 16, 2009

In a recent conference, analyst William Forrest says that large companies could end up paying more than twice as much by using cloud based services. According to a Forbes.com report,…

Cisco’s Cloud Computing Strategy

By G C Network | April 10, 2009

A couple of weeks ago, Krishna Sankar provided a glimpse into Cisco’s cloud computing strategy in a presentation titled “A Hitchhiker’s Guide to the Inter-Cloud” . The presentation outlined the…

NCOIC and Cloud Computing: An Update

By G C Network | April 8, 2009

As the NCOIC gets it’s arms around this new paradigm, the Cloud Computing Working Group has focused on establishing a roadmap for providing value to the industry. Using the established…

SUN-IBM Talks Breakdown

By G C Network | April 6, 2009

As reported in multiple sources today, including Reuters, Sun has apparently rejected a purchase offer by IBM. “Shares of Sun Microsystems Inc tumbled 22.5 percent after it rejected a $7…

Former DoT CIO on Cloud Computing

By G C Network | April 3, 2009

Last month, former Transportation Department CIO Dan Mintz offered his views on cloud computing to Eric Chabrow, Managing Editor of Government Information Security. According to Mr. Mintz, there is currently…

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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.