By Eric Lester
Most of you know me as the former technology change and innovation leader for one of the world’s largest life insurance carriers. Over the past twenty plus years I’ve had the great opportunity and privilege of helping bring some awesome new technology to our industry, one being ePolicy Delivery.
In early 2010 we made the choice to build an ePolicy delivery platform with the underlying chaise being that of a popular eSignature vendor. We, as the carrier, decided to build our own offering because at the time solution providers were in their infancy with their own products and their costs for implementations, annual licenses, and transactions were, let’s just say high at the least.
Over the years our offering became one other carriers would point to as a successful model and used to self-justify building a similar solutions of their own. Because of this I still regularly get asked “should I build and/or keep maintaining my own ePolicy delivery solution or license one from a service provider?”
Well, this may come as a shocker for those of you who know me well, but I’m here to say on the record that I would be hard pressed and need a very compelling reason to build another one given the current landscape. I’ll share with you a few quick points of why.
· SOLUTION PROVIDERS NOW HAVE GREAT SOLTUIONS: In the early days when we were pioneering ePolicy Delivery, solution providers had products that weren’t really much better than what we could build. Fast forward nine years and these providers have invested millions into their products offering better functionality, scalability, and means of garnering adoption. There’s little carriers can do to improve on what’s already being offered.
· MAINTENANCE IS A NIGHTMARE: Any carrier who has built their own software solutions knows that the build part is only half the battle. The war is won by keeping it current with new functionality and continually innovating while you have limited IT resources and 10 other large projects that need to get done each hear. For me, there were multiple year spans with 50+ enhancement sitting on the roadmap and we couldn’t even address one of them. Solution providers on the other hand have to keep up the innovation in order to stay competitive.
· EXPENSE IS OVERBEARING: Don’t fool yourself, building and maintaining software is expensive. Don’t forget, that unless you build everything, you’ll have to account for expenses like eSignature which adds up quickly. It’s important to also think about your internal resource abilities; to keep your new offering up-to-date and do it well you should expect to spend around 1,000 hours for BA and Development work annually. Let’s be honest, most carrier home grown software is not built with configurability and rules that can be defined and updated by the business areas. Whereas leading edge technology companies are in production now with platforms that can be configured for workflow, forms and ability for customers to dynamically change the policy on the fly – Think Up Sell!! Now that there are multiple providers offering ePolicy delivery today, prices have dramatically dropped making very little sense not to implement one of them regardless the size of your company.
· MORE DISTRIBUTION REQUIREMENTS: This one folks is the big deal and you shouldn’t take it lightly. Unless you’re solely a career carrier you need to think about your distribution and how they sell – direct to the consumer, via the independent channel, through banks or broker dealers, etc. These dynamics weren’t much of a concern in 2010 as they are today. Distributors are now demanding different workflows, communications, and ways to support their partner’s compliance when it comes to technology. In addition, if you’re listening to the market, and I hope you are, they want a couple of multi-carrier solutions to pick from. If you’re not on that multi-carrier eDelivery bandwagon now I guarantee that in the very near future you’ll be pushed in that direction.
I’m sure a few of you are sitting on the floor right now saying to yourself “this isn’t the Eric I know” because he had a tendency to build everything in-house.
We’ll times are a changing folks, and our industry is finally kicking itself into high speed on the InsureTech express. If you can’t keep up and stay innovative you’ll be pushed out of the way by the carriers you compete with. Eventually you’ll end up like so many other carriers over the past decade that either get shut down or bought out.
That’s the harsh reality of today, and frankly you’ve got a lot of other fish to fry than worrying about building or maintaining an ePolicy delivery solution yourself. Especially when you can easily license one that can be implemented in half the time and provide 10 times the functionality than you could ever build.
About Eric Lester.
Eric has recently formed his own technology consulting company, Nexus Insurance Services, located in Charlotte, North Carolina. He is actively engaged in working with technology companies, carriers and brokerage agencies to identify best-in-class solutions and create partnerships with the companies that are best aligned. Eric may be reached by phone at 204.328.9617 or via email email@example.com