Delivery Plus Service Equals Innovation
C. Bruce Davis of AQS discusses the changing relationship between service and insurance.
BEST’S REVIEW: How important is change in technology?
C. BRUCE DAVIS: Change can be viewed as a constant, since technology never will be static. Or, change can be viewed as an irrelevance, since it has to be anticipated and accommodated. But it can’t be predicted or stopped. Like taxes and car payments, you learn to live with it.
BR: How important is innovation to technology?
DAVIS: Technological innovation is misleading. Think about this: We’re eight years removed from Y2K. Yet it seems like ancient history. In its wake, we’ve been through component-based architecture, object-oriented programming, service-oriented architecture, Web services, and who-knows-what? None of that fundamentally changed the insurance industry. But it has changed the way insurance and insurance-related services are delivered. What’s important is how to use the technology.
BR: Is service more important?
DAVIS: Yes, innovative ways to deliver and apply technology, to facilitate underwriting and data access, to integrate third-party information and ancillary systems to make policy-lifecycle processes more effective and efficient. Those things are as important to vendors as they are to insurers.
Insurers, of course, have to deliver product—policies that meet the coverage needs of the policyholder and the risk-acceptance criteria of the underwriter. They also have to deliver service that meets the needs of policyholders, along with the requirements of their distribution partners. As long as product and service delivery are improved, efficiency and productivity are increased, and expenses are reduced, the technology is immaterial.
Vendors have to deliver services desired by insurers. In our case, that’s policy administration. Vendors use technology to deliver those services.
BR: Then what should we make of the focus on innovation?
DAVIS: Innovation is the right focus, as long as it’s not on technology. Will someone introduce a technology tomorrow that will revolutionize insurance processing? Probably not. But we will see ongoing innovation in the ways in which services are delivered to insurers and, correspondingly, in the ways in which insurers deliver products and services.
BR: What challenges are most important to the insurance community?
DAVIS: Insurers will always face the challenge of delivering products and services to customers whose product knowledge becomes more sophisticated and whose expectations grow more demanding. Consequently, as technology becomes homogenized, and as business processes become more standardized, vendors will be challenged to deliver sound services and deliver them in ways carriers want them. From providing full control to offering their customers self-development tools and the desired degrees of self-control, vendors will help make their customers self-sufficient. And they’ll define innovation and competitiveness in terms of service and delivery.
We’re continuing to evolve from a vendor-service model toward a self-service model, giving customers the ability to make their own product and system-configuration changes. Along with service, we see the need to offer choice to the delivery options we provide insurers.