Technological advancement in insurance is “critical” for the industry. But not all tech is created equal and many carriers are flailing in the search for the right platforms.
Insurance carriers are playing catch-up to develop the technology needed to cater to consumer and industry expectations. Sometimes, though, they’re missing the target. John Guadagno, EVP of contract binding operations at wholesale broker US Risk Underwriters, explains how carriers aren’t always pressing the right buttons.
Tech development is of “critical” importance to the industry, says Guadagno, who recently launched a contract binding web portal at the general lines excess and surplus wholesaler.
“I will say, from my experience, especially on the large carrier level, information technology is just a vast sea of boondoggles, and most carriers don’t get it completely or haven’t implemented the right solutions. Most of them are seeking better solutions. There are only a handful that really get the technology and have effectively implemented it.”
Other carriers are “just trying to catch up”, he said – and not always successfully. Some carriers – awash in the seas of boondoggles – are haemorrhaging funds in their pursuit of the right technology.
“In my experience on the carrier side when I worked for some of these public companies, in a decade I witnessed probably close to $20 million of IT write-offs for failed implementation projects. I’d never seen anything like that in my career,” he said.
“They’d spend multiple years and million and millions of dollars on these implementation initiatives and then they get one, two, three, four years out and then they can them. They just dump the whole initiative. One company, in particular in just a two-year period, I witnessed them take almost $14 million in write-offs between two failed technology implementations.”
“Insurance technology is almost like a foreign language to many people,” he added. “There’s a small group of players in the technology space that get it. The carriers are definitely aware that they can’t not address technology and implement it, because [otherwise] they’ll just become obsolete and be exceeded by their competitors.
“My belief is that there’s really maybe 10% of the carriers that get the technology and can implement it. The rest are in varying levels of effectiveness. And some are pretty poor.”
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