Juergen Weiss

A member of the Gartner Blog Network

Juergen Weiss
Research Vice President
5 years with Gartner
14 years IT industry

Juergen Weiss is research director and industry services director in the Gartner Industry Advisory Services group, focusing on insurance. Mr. Weiss covers a number of insurance industry topics, including risk management and… Read Full Bio

Opportunities and Risks of Digitalization in Insurance

by Juergen Weiss  |  November 26, 2014  |  Submit a Comment

Kimberly Harris-Ferrante here:

Changes are unfolding quickly in the insurance industry. Pressures to transform are growing, consumer preferences are steadily shifting, and competition becoming more fierce than ever before in many markets. Digital business model transformation is believed to be the answer by many to meet these new business demands. However, while this is a key tenant to staying competitive, we do not think that this transformation will be easy or not met with new challenges, or that digitalization alone is the only answer to maintain leadership position in the market. To help guide insurers, we have released our 2015 insurance prediction report which highlights 5 key predictions for global life and P&C insurers. These predictions, which address how digitalization will enable improved financial returns, the magnitude and speed of change among insurance consumers, the immaturity of big data within the industry, the security ramifications of internet of things technologies, and the slowing speed of core system replacement projects, will provide guidance for CIOs and IT leaders in building improved IT roadmaps, avoiding pending risks associated with emerging technologies, and help to understand how business transformation will be supported by new IT endeavors. We encourage business and IT leaders alike to review these predictions to update strategies accordingly and compare against 2015 IT investments in order to achieve improved business performance and avoid unnecessary risks.

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How mature is your digital strategy?

by Juergen Weiss  |  November 15, 2013  |  Comments Off

Digitalization in insurance has become one of the biggest buzzwords in the insurance industry during the last 9 months. We have just completed our Symposium in Barcelona and we hosted a group of more than 50 CIOs and IT executives from insurance during a digitalization workshop. We discussed different expectations and experiences with them and it became obvious that the definition of digitalization varies considerably in the industry. The workshop participants mentioned topics such as customer centricity, operational efficiency or predictive analytics when we asked them about their digital priorities.  We used portions of our digital maturity toolkit to evaluate how advanced digitalization strategies in insurance are. To summarize the result: average at best. One of our biggest concerns is that both business and IT managers in the insurance industry seem to overestimate the maturity digital strategies. In a recent research note we have already addressed this issue because we believe that this wrong perception could actually lead to wrong conclusions and a limited scope of digital strategies. What’s your opinion? Do you believe that your digitalization strategy is already mature? Or do you believe that the whole topic is completely overhyped?

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Is the Flurry of Acquisition Announcements a Sign of What is Yet to Come?

by Juergen Weiss  |  March 12, 2013  |  2 Comments

Kimberly Harris-Ferrante here.  The number of acquisition announcement from vendors has me thinking about what is yet to come in the crowded insurance technology market. The market today is extremely crowded with many best of breed vendors that offer a solution to solve only a single business issue, meet the needs of a single product line or region, or support only one part of a multi-step process.  In many regards, this is worsening over time as new technology vendors enter the market to solve new business problems – for example providing mobile applications for claims or e-signatures. While these are critical aspects for insurance processing, they are narrow and niche business processes.

Increasingly insurers want to control complexities in their vendor landscape, as well as reduce the number of vendors which they need to integrate and manage. This is conflicting to the current market conditions and one factor which is driving the vendor market consolidation. Vendors merging or acquiring to support end-to-end processes and filling product line gaps is a positive step forward for an ever complex vendor market. While there will be confusion and disruption as acquisition happens, it should be seen as positive long-term. Gartner hopes more consolidation will happen over the next 3 years, as well as more partnerships and OEM relationships between vendors. Supporting end-to-end processes should be a goal of vendors and a consideration in their long term business development. Niche vendors may be good for tier 1 buyers especially for state of the art and innovate technology, however this model will be too complex for mass market buyers. I say – consolidate and partner away! There are too many vendors and too much complexity today in this market.

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AQS Acquisition Reflects P&C Core System Market Trends

by Juergen Weiss  |  March 6, 2013  |  Comments Off

Jeff Haner here: On March 5 2013 Insurity announced that it had acquired AQS for an undisclosed amount. Insurity has indicated that no changes are planned for the support for existing AQS customers. The AQS offices in Hartland, WI and Nashua, NH will remain open, and no staff reductions are planned.

On the surface, there is substantial overlap between Insurity and AQS. Both companies have a long history in the P&C industry and offer policy management modules that have been deployed primarily in support of commercial lines. However, Insurity has indicated that it was not targeting the full range of AQS policy solutions with this acquisition, but focusing on specific assets that AQS offers: a stand-alone rating engine, business rules, and a relationship with ISO that is unique in the industry. Per Insurity, these AQS assets fit well with planned enhancements to Insurity’s policy system, Policy Decisions.

Insurity plans to introduce AQS functionality as incremental enhancements to its Policy Decisions customers. Timing for these product changes has not yet been announced. While support for AQS customers will continue, Insurity will only be offering Policy Decisions to new customers.

This acquisition reflects several trends in the P&C core system market:

  • A growing preference for modular suites.
    Best-of-breed vendors are at a disadvantage as buyers increasingly look for vendors who can provide all core system modules in an integrated suite. Gartner expects to see the number of best-of-breed vendors shrink as these vendors either build out or acquire additional modules to offer a full suite.
  • An emphasis on configuration tools that enable self-sufficiency.
    Although many insurers engage their core system vendors for some level of ongoing support, buyers are placing a high priority on configuration tools that would enable them to independently. Insurity has been investing in the configuration tools it provides with Policy Decisions, and this AQS acquisition provides components that may accelerate planned enhancements.
  • The need for rapid product development.
    Product updates can be challenging for insurers – especially those who offer ISO-based insurance products and find it difficult to stay current. Insurity has an existing internal bureau which interprets ISO circulars and provides updates to Policy Decisions customers. By acquiring AQS, which provides the software and tools that ISO uses for the Verisk ISO Rating Service, Insurity has access to additional capabilities for providing content electronically.

There is overlap between Insurity and AQS, but this acquisition offers some intriguing possibilities. Insurity must move quickly, though, to leverage these newly acquired assets. There are several competitors who offer full core system suites with strong configuration and product management capabilities. For an overview take a look at our latest MarketScope for North American P&C Policy Management Modules.

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Location Intelligence: Keeping Track of Covered Assets for Property Insurance

by Juergen Weiss  |  November 5, 2012  |  Comments Off

Kimberly Harris-Ferrante here: “P&C insurers offering property coverage must embrace new techniques to help lower the cost of physical inspection, increase the accuracy of risk assessment, improve claims handling, reduce fraud, and improve accuracy of pricing and underwriting through greater insight into property risks. For years, companies have questioned how to accomplish this, and began to adopt technologies, such as GIS and geocoding, in isolated instances throughout the enterprise. Initiatives often started with underwriting, but did not expand to other business units or emerging technologies, nor were they integrated into the core insurance systems or desktop technologies used by insurance professionals. This research outlines the emerging area of location intelligence, explaining its use for property insurers. Location intelligence is the use of new data sources — both structured and unstructured — to assist P&C insurers that are conducting property valuations and risk assessments with determining the accurate risk associated with a physical location or property. This includes mapping technologies, such as GIS and geocoding, as well as the use of Internet-based maps and digital/aerial imagery offered by specialty companies servicing the real estate, insurance and government market. It is important to note that data is not available in all countries, cities and locations. Many countries have limited information that is provided by governmental agencies. In rural areas, imagery may be updated infrequently or is not available at all. Assessing the quality and accessibility of data must be a fundamental step in planning for location intelligence. Location intelligence today is not a well-known concept among P&C insurers. Tier 1 companies mostly made investments in GIS and geocoding in the past, but this has yet to become commonplace in Tier 2 and Tier 3 companies, or in geographies outside the U.S., Canada, and the U.K., where vendors are prevalent.” Read this note for further details: “Location Intelligence and Property Insurance: Underused Assets to Improve Risk Decisions for more information on location intelligence”.

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Industry Sunday at Gartner Symposium

by Juergen Weiss  |  October 21, 2012  |  Comments Off

Industry Sunday at Gartner Symposium in Orlando has just kicked off. There will be several insurance sessions today focusing on future trends, claims transformation, cloud computing and other topics. One of the key themes of this year is how the Nexus of Forces, combining social, mobile, cloud and information, will further transform and digitalize the value chains of insurers. Those of you who join us this year in Orlando will take away a lot of good ideas for innovation. A lot of these ideas will also become part of upcoming published research.

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Gartner Symposium Orlando is about to start in one hour

by Juergen Weiss  |  October 16, 2011  |  Comments Off

While preparing for the kick-off of Gartner’s Orlando Symposium I have been thinking about the relevance of this year’s theme for the insurance industry. The theme “Re-imagine IT” fits very well to the current state of the insurance industry which is in many regions still suffering from a difficult business environment. Emerging technologies such as cloud computing, mobile technologies and social media as well as an exponentially growing data volume will create many challenges for insurers. Insurers need to figure out how they deal with these business and IT changes in order to remain competitive and to strengthen the relationship with their clients. This environment creates on the other hand a wealth of opportunities of IT departments. for demonstrating their value to the business.  During the next four days Gartner will discuss with clients how these forces will shape the IT market environment for customers and vendors and what this means to the business. If you can’t join us onsite, I encourage you to follow the Gartner Symposium news on the internet.

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Policy administration systems require more reflection

by Juergen Weiss  |  September 13, 2011  |  Comments Off

Jeff Haner here. It’s been fascinating for us to watch the surge in activity around policy administration solutions. As we talk with Gartner clients, I’ve been surprised at how many are, quite simply, embarrassed about the amount of time it is taking to implement their new policy administration solutions. There seems to be a common misconception, perhaps fed by marketing claims or experience with simpler systems, that the move to a new policy administration system can be finished in months, or even weeks. While short implementations can be accomplished under certain circumstances, based on the trends that Gartner sees, most insurers of any size that are moving off legacy systems will be looking at about a year to complete their first deployment, and at least another year or two to fully migrate to their new system. Longer timeframes are not uncommon.

When insurance IT leaders share the lessons they’ve learned from these experiences, we frequently hear two themes: the importance of business requirements, and the negative impact of customization. In a recent research note where we analyzed key policy administration requirementswe we came to the conclusion that those insurers who invested in documenting their business requirements in detail beforehand had fewer issues and were able to deploy faster. In another note we found that nsurers who succeeded in selecting systems that were a good match for their needs were able to rely more on out-of-the-box functionality and minimize time needed for customization. They also experienced fewer maintenance issues with subsequent upgrades.

The implementation of a new policy administration system is a very significant, difficult undertaking. If you’re in the market for a new policy administration solution, be prepared by understanding your requirements well, select a system that is a good fit for your needs, and be sure to set expectations within your organization that change of this magnitude is not easy.

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Business Process Managament Systems: Not a One Trick Pony

by Juergen Weiss  |  June 9, 2011  |  1 Comment

Kimberly Harris-Ferrante here. At Pegasystems’ Pegaworld this week, I started thinking about the role and how BPM suites fits into the insurance IT environment. The event brought together over 300 attendees for insurance and healthcare this past week in Orlando, Florida.  Sessions explored best practices in BPMS implementation, lessons learned, and decision criteria for project justification. One thing emerged as a key finding – BPMS is not a one trick pony. The applications of BPMS is diverse and expansive, crossing IT and business as well as various business functions such as customer service, policy servicing, and claims. The potential is limitless as long as insurers have creativity and good vision of the processes that they want to automate and improve. This is evolutionary to an industry which is plagued with legacy systems, redundant systems, and LOB/global silos.

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Regulation on top of insurance risks

by Juergen Weiss  |  June 6, 2011  |  Comments Off

The latest Insurance Banana Skins survey by the Centre for the Study of Financial Innovation (CSFI) and PwC indicates that regulation will dominate risk management concerns within the insurance industry in 2011. Compared to the last survey, regulation jumped from rank 5 to rank 1 leaving capital and macro-economic trends behind. I’m not surprised about this result because it is pretty obvious that the industry has entered the age of re-regulation with a myriad of new regulations such as Solvency II. We have written numerous research notes on Solvency II, SEPA and other regulations such as the UK’s Retail Distribution Review. While all those regulations have major impacts on the IT landscape and usually call for significant investments I wouldn’t focus on the risk aspects only. These regulations also create major business opportunities for those organizations that are not treating them like a mere check-box exercise. Take Solvency II for example which will force insurers to pay more attention to operational efficiency and reconsider common business models. Insurers should always see both sides of the medal instead of complaining only about the costs and risks of regulations.

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