Disruption in insurance: not a matter of ‘if’ but a matter of ‘when’January 29, 2018
In an interview on the digital insurance agenda, AXA Chief Marketing Officer and Chief Digital Officer Amelie Oudea Castera talks about the challenges of delivering the Digital Insurance Agenda, the disruption of insurance, and the challenges & success factors of teaming up with Insurtechs.
As a former world champion, Castrera compares the insurance business with a tennis match: “On top of technical skills, insurance requires attention to every detail, a mix of action and anticipation, a capacity to work over the long-term and a lot of technical expertise!”
According to Castrera it is not a matter of ‘if’ there will be a disruption in the insurance industry but a matter of ‘when’. Teaming up with Insurtechs is essential in order to keep up. In her opinion, the greatest challenge for incumbent insurance companies in this cooperation is the cultural gap between the startups and large corporate worlds, including for example the difference in speed of decision-making or the discrepancies in terms of focus (growth vs. profitability).
What we, as legacy transformation experts, find is that legacy environments are often a huge bottleneck that negatively influences exactly those areas. When IT organizations focus on keeping business-critical legacy systems running, valuable resources and huge budgets are taken away from innovation, integration and cooperation.
The moment they decide to get off the mainframe and migrate their legacy applications there is a clear shift in focus which opens the door to innovation. A great example of this is VIVAT, this large insurer encompasses multiple insurance brands (e.g. Reaal Dier & Zorg, Zwitserleven, Reaal, Route-Mobiel and Zelf) and a sustainable asset manager (ACTIAM).
Over the past decades, VIVAT had developed its core insurance systems using the Unisys EAE/LINC programming language running on Unisys Libra 690 mainframes. They found that this environment burdened them with high costs and limited flexibility. After they migrated 15 different applications, of which 8 business-critical, they not only achieved an immediate reduction of 70% on infrastructure and operational cost but there are also new functionalities available that help them realize their growth and innovation ambitions.
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Top 5 retail trends 2017 – 2018July 17, 2017
Top 5 retail trends 2017-2018
- Flexible stores
The number of traditional stores is decreasing but there’s an increase in non-traditional concepts like pop-up-stores and mobile stores.
- Chatbots and Artificial Intelligence (AI)
AI chatbots that facilitate mobile commerce are on the rise. They are continuously present during the customer journey.
- Mobile wallet
More and more it is possible to pay by using a mobile phone. People barely carry cash anymore. The mobile wallet is the future.
- Virtual and augmented reality
Although invented in the USA, the APAC region takes the lead in VR. Huge investments are made in creating the best VR shopping experience.
- Voice control
Besides the widely used search commands, voice control services like Siri of Apple, Alexa of Amazon and Allo of Google will more and more be used for purchasing and payment.
Legacy systems major show stoppers for innovation
Today’s consumers are demanding. If they see something they like, they want it right away, same or next day latest. The above trends are developed to accommodate these demands. If you cannot deliver, you lose business. Supply chain optimization is key.
However, all of these trends require massive data exchange, advanced integrations and a high degree of flexibility in order to process high amounts of orders, enable easy payment, fast delivery and manage customer care. Legacy systems are major show stoppers that slow down innovation in this fast-changing and highly competitive market. In order to stay ahead retailers, have to modernize these legacy systems and embrace new technology.
Smart retailers have taken steps to transform their legacy environment and open the doors for innovation. See some examples below.
Associated Food Stores
For over 25 years Associated Food Stores ran the core system of their business on a Unisys mainframe. The move to migrate these systems to a Microsoft SQL environment saves them hundreds of thousands of dollars each year. They now run the same core systems on two virtual servers. Check out the case study.
Brabantia is a privately owned Dutch company that manufactures and sells items for the home such as waste bins, laundry racks, food storage containers and other products.
The nightly scheduled batch procedures on the NX4600 machine was running out of the capacity and was declining the operational on-line performance. Therefore, Brabantia needed a migration to directly solve their batch capacity issue. After the migration, they only use half of the capacity of the NT machine and with the on-line reporting of AMT LION they are able to service users with operational information fast. Their business applications run just as stable under Windows as they used to do on the mainframe. But now they are much more flexible in linking to external applications and can easily provide their legacy applications with a web interface. Check out the case study.
For years Toolbank was using a Unisys A-series mainframe to run its ERP system. Concerns regarding the long-term commitment from Unisys in combination with the constraints of the mainframe, which was holding back the enhancement and development of the platform made Toolbank decide to migrate its mainframe to open systems using Asysco Migration Technology. A good decision, as it turns out. Not only did they achieve ROI in under 3 years, as anticipated, but they have also been able to integrate modern .NET screens with the application as well as API interfaces for Excel. Users are happy and the applications are future-proof. Check out the case study.
Legacy system modernization key in accomplishing Digital GovernmentJuly 13, 2017
Governments worldwide still heavily depend on legacy technology. In fact, approximately three-quarters of all IT related budgets are spent on keeping legacy technology running. Besides the huge spending, many skilled legacy code programmers are nearing their retirement age. Valuable knowledge is walking out the door and few new programmers can be found. Meanwhile, Government agencies struggle to innovate and keep up with the increasing citizen demand. Things must change. The need for Digital Government is pressing.
A Gartner global survey of government sector CIOs found that 13 per cent of the technology budgets of public sector entities will go towards legacy modernization this year.
“Governments need to pay down technical debt by accelerating modernization initiatives to allow them to explore alternative sourcing options and to focus on innovation and meeting citizen expectations. Application rationalization is part of this, so the Government’s commitment in the budget to platform consolidation and a shared services model should help accelerate the transition to digital government for many of the smaller agencies,” Dean Lacheca, Gartner’s public sector research director, told CIO Australia.
Although Government has set aside funding for legacy ICT modernization, all change is challenging, specifically when resources are tight and risk is high. Old legacy systems need to be transformed, existing data needs to be preserved while integration between separate agencies and citizen access to public services need to be improved. Safe federated data exchange platforms reduce the need for citizens to enter similar information to multiple agencies. In addition, enhanced data analytics enables Governments to design better targeted and more effective public services, e.g. in education, social services, and health care.
These point-to-point data exchanges between several government agencies require flexible and secure integrations which cannot be accomplished with legacy systems. When considering a modernization there are several options to choose from like rewrites, standard off the shelf packages, lift & shift and Legacy Transformation. Check the video.
On top of that is the security issue. Cyber attacks are the order of the day and civilian security is at stake. While Cloud computing offers maximum flexibility and agility at lower cost, it is a challenge to achieve compliance. Therefore, Microsoft has developed Azure for Government, a sophisticated Cloud solution that has the most certifications to simplify critical government compliance requirements.
Successful Government Legacy Transformations
At City of Columbus the migration of the Criminal History mainframe system to a Windows platform resulted in faster access to crucial criminal information databases for police officers and their law enforcement partners. Check the case study.
Right after the migration, Swedish Transport Agency was able to reduce batch time for an end of year batch from 7 hours to just 22 minutes. Due to the higher performance of the system the number of operational issues was reduced instantly as well. Check the case study.
At the Treasury Office of Allegheny County, the migration of their Fund Accounting and Investment (FAI) legacy system to a Microsoft Windows based platform enabled them to more quickly receive and reimburse funds and to rapidly update the FAI system due to changes in tax law and regulations. Check the case study.
Legacy systems & the Internet of ThingsJune 9, 2017
Are you ready to jump on the IoT train?
Internet of Things (IoT) is the next megatrend. The 1990s’ fixed internet wave connected 1 billion users while the 2000s’ mobile wave connected another 2 billion. According to a Goldman and Sachs study, the IoT has the potential to connect 10X as many (28 billion) “things” to the Internet by 2020, ranging from bracelets to cars.
IoT will have far-reaching implications that touches every industry, from healthcare to retail to oil and gas exploitation and homebuilding.
Just as the first 2 waves of the internet era led to profound changes in the economy, the IoT will create new winners and losers based on a company’s ability to adapt to a world where things are connected.
Insurance Nexus recently conducted an Insurance IoT Industry Survey which shows that 90% of the 350 respondents agree that IoT will revolutionize the way insurers do business. It also shows that only 7% of the Insurance companies are fully embracing IoT today.
Don’t miss the train of IoT opportunities
The insurance world increasingly embraces IoT initiatives that help reduce risk, improve loss ratios, claim to handle and drive premium growth like:
• Telematics: gathering car data like the history of speed, distance, turning and braking patterns, time of day, etc. to price and maintain “usage-based” insurance (“UBI”).
• Environmental Sensors to detect temperature, smoke, toxic fumes, mold, earthquake motion, etc. With two-way communication, these IoT devices can also provide predictive alerts on potentially dangerous conditions.
• Connected Biometrics. Gathering lifestyle information on daily activities like calorie burn, heart rate and sleep pattern history.
• Diagnostics: Highly intelligent sensors are embedded in many products including appliances, toys, consumer electronics, industrial machines, vehicles, etc.
As manufacturers of these devices embed and enable IoT, predictive and preventative service prior to product breakdown or component failure can be provided.
Mainframe blocking the road to innovation
The new world requires a new approach to new technology. Transforming Legacy Applications is mandatory in order to:
– embrace new technologies, protocols and standards. The ‘old’ mainframe technology makes it difficult to connect to new technologies
– handle data and analytics. Legacy systems are not able to keep up
– deal with security challenges. Cures for new threats are developed for new technologies first
– smoothly connect/integrate all different environments – open systems are much easier connected than mainframe
– avoid exorbitant operational costs. The drastic increase in workload and MIPS will drastically increase the cost
– keep up with the competition. Time to the solution is a major driver in gaining and keeping a competitive advantage. Legacy can be a major road blocker in the race for market share
Innovation is key if you do not want to miss the train of IoT opportunities.
It is clear that the mainframe does not offer the flexibility and agility required to adopt new technologies. Although the transformation of your mainframe environment requires an investment the immediate cost savings, due to drastically reduced operational cost, make the ROI rapid and the investment worthwhile.
Don’t move the legacy issue elsewhere but solve it by truly transforming it….
Check out the success stories
Save cost, gain agilityFebruary 8, 2017
On average, a company spends between 60% and 80% of the IT budget on maintaining existing systems instead of on new developments. Half of these costs are related to the time and resources spent on the research and adaptation of legacy systems. However, technology evolves faster than ever. Organizations that are able to adapt to this new technology paradigm quickly are more successful than companies that are held back by their inflexible and expensive legacy systems. If legacy systems are a bottleneck for innovation, legacy transformation is the answer!
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No place for legacy systems in InsurtechJanuary 11, 2017
The insurance landscape has changed drastically over the last few years. As Insurance thought leader Matteo Carbone states in his article: ‘The future of insurance is insurtech‘, the insurance sector has entered a phase of profound transformation. According to Carbone: “The amplitude of the digital transformation happening in the insurance industry is widespread and encompasses all of the phases of the insurance value chain, from underwriting to claims.” This requires a complete shift of IT processes and technologies that most established insurance companies still run their business on.
Carbone has developed a classification framework called Connected Insurance which represents a new paradigm for the insurance business, an approach that fits with the mainstream Gen C, where “C” means connectivity.
The question is how to enter this new paradigm when burdened with legacy systems, while competition is fierce and new insurtech companies are entering the market quickly.
When asking Carbone, he replied that he basically sees two possible scenarios for established insurers with legacy systems: they either cooperate with start-ups or they purchase new systems and migrate their applications. Either way, there’s no place for legacy systems in today’s insurtech landscape.
These legacy systems, however, contain a business value. Many of the more or less standard packages have long been migrated to off the shelve applications. What’s left are business-critical, in house developed applications. On the one hand, they are the heart of the business but on the other hand, they are a bottleneck for innovation. Inflexible, high maintenance and difficult to integrate with modern technologies. It seems like a daunting prospect.
What if there was an automated way to transform these applications while keeping their business value, in a way that does not interfere with business and has little to no impact on users? Sounds too good to be true? Check out a real customer experience at OTP Banka Croatia.