Never before has the need been stronger to ensure product and plan configuration is leveraged across the enterprise, from upstream activities like product strategy and sales to downstream processes like claims management.
For insurers to achieve true enterprise integration, CIOs need to utilize and consolidate numerous data sources into a codified data structure that can be leveraged across the enterprise.
This seems like a logical approach, but it's surprising how many organizations choose to resolve data challenges transactionally rather than at the root cause. Because of this, change response time is slow. By the time requirements have been put in place to solve one business problem, a new one emerges that needs to be addressed.
Many insurers aren't solving the right problem because a digital source of truth doesn't exist. Plan designs, marketing materials and print, as examples, are siloed within the enterprise in different formats. Print vendors may request a specific format that requires product operations involvement. Product has to respond to those needs along with the pressure of sales teams creating innovative custom plans that can be serviced. The sales cycle loses its linear efficiency, straining resources and slowing speed to market.
Product diversification is also a challenge. To remain competitive, insurers need to deliver new products rapidly by creating multiple product variations and plan designs that are cost-effectively distributed to businesses and consumers through multiple channels.
For instance, insurers selling Medicare Advantage plans without a digital source of truth struggle with complex compliance documentation--like the Annual Notice of Change and the Evidence of Coverage--because they're adding resources to generate and deliver these documents in a short time frame under federally regulated governance. If products and plans were codified in a digital source of truth, this process would be systematic. It's the manual intervention that increases cost and introduces risk for error.
To participate in accountable care organizations and private exchanges, insurers need the ability to share data both across and outside of the enterprise. Insurers working from multiple systems of record may be able to respond to evolving change and opportunities, but the resources required for fulfillment will impact margins.
Perhaps the largest pivot for insurers is how to sell to and engage individual consumers. The individual market has always existed, but to compete and win on a multicarrier private exchange or in the public marketplace requires the ability to demonstrate and differentiate value. Insurers are exercising direct-to-consumer proficiencies when they've always just focused on a group sale model. Selling to the individual market requires an agile sales cycle framework which essentially is delivering product in a retail environment.
The market demands more agile, flexible products. Text- and design-driven products and plans are antiquated pegs in the insurer sales cycle. Moving toward a product and plan configuration model from a digital source of truth using codified data is critical for insurers to compete and win. Without codified data, internal workflow and external integration is essentially broken, requiring manual intervention that incurs annual costs.
Interestingly, the influx of CIOs from different industries reflects these new market opportunities for insurers. Progressive, innovative technical talent, often with direct-to-consumer experience, is leading the charge to develop the infrastructure for product and plan development for multiple distribution channels.
A common challenge for the CIO is to find a balance between day-to-day operations and innovation. Transforming the organization from multiple silos to one digital source of truth provides value to both initiatives. Sustainability becomes easier and the business is set up to respond to evolving change and opportunity.
Cathy Chiang is the SVP of Payer Strategy for HighRoads.