InsurTech Ohio Spotlight with Jake Sloan
Jake Sloan is the Global VP of Insurance at Appian. The Appian Process Automation Platform enables organizations to rapidly design, automate, and optimize their most important business processes. Jake was interviewed by Michael Fiedel, a Managing Director at InsurTech Ohio and Co-Founder at PolicyFly, Inc.
Jake, when carriers are confronted with core system challenges, how would you frame their options?
“The IT agenda has never been more full, especially in the current market conditions. Business stakeholders are asking for faster delivery and need to see faster ROI. The technology organizations are typically overprescribed from a capacity perspective and likewise need a way to accelerate their delivery. When IT is confronted with core system challenges, their options are more plentiful now than ever, especially in the context of a hybrid architecture approach. We see rip-and-replace projects continue to fall out of favor, due to the massive investments, risk, and timeframes associated with these projects
Taking a hybrid approach allows insurers to de-risk these deliveries, move to or further expand on their use of an agile framework, and modernize their core systems incrementally–where you can add multiple teams and have a cloud-oriented, low-code process automation platform to supplement it. Taking a hybrid approach gives technology leaders more agility, speed, and flexibility than they’ve ever had, enabling them to better meet changing business demands.”
How practical is an incremental approach to modernizing core systems?
“Very practical. I stop short of saying it's the only approach, but when you think about the larger rip-and-replace initiatives that we've seen previously, certainly they have their place, but that’s few and far between these days. The incremental approach is very accommodating in the sense that you can deliver value right away, typically with fewer resources, etc. You can take the information that has already been disseminated and the application that you start from, and pivot from that further to drive greater efficiency and innovation. So, it gives immediate lift and gives the IT organization different capability sets for these tools to deliver value.
Now, with the focus on talent retention, profitability, and various risk aspects, more than ever, you're going to see these changing dynamics and requirements become more important. The ability to digitally transform incrementally is largely dependent upon insurers’ tech stacks. I didn't coin this, but you know the term ‘wagile’? Is it ‘waterfall,’ ‘agile,’ or right-in-between? As it relates to the incremental approach, if you have a largely antiquated, rigid on-prem legacy system, maybe your options are minimized, versus having a cloud-based hybrid approach augmented with something like low-code, and you are able to plug in each as a best-in-class solution (core admin combined with low-code).
Ideally, you would put a best-in-class CRM (customer relationship management system), on top of a best-in-class core policy and claims admin, on top of a best-in-class rules engine. Or, you take whatever you bought and try to put an all-encompassing software into that investment. That's what we've seen more of. Businesses take the COTS approach, which is typically an inflexible blend of various pieces, thus, nothing is best in class. Then they have something that's just not flexible. It's not intended for rapid change and organizations cannot afford that inflexibility.”
What tools have you seen implemented that are strong examples of new technology that can complement legacy systems without requiring replacement?
“Thinking about low-code in particular, low-code’s visual design method is cloud-oriented, it's intended as a complement. Low-code is not a core admin system, but what we do exceptionally well is design process improvements and applications that are going to lend that lift for change, which also derisks the core admin upgrade path. You can pick off workflows and processes one by one until more and more of your operations are automated or go after larger use cases for automation of a large process segment, like FNOL intake or underwriting intake, etc. Low-code in particular is one example. RPA (robotic process automation) had its place, and we see RPA strategies still out there. If you keep RPA narrowed in on high frequency, low complexity tasks, then those strategies can make sense. But what we're seeing now is the focus on more low-code process automation as a complement to things such as core admin strategies in order to get the best of both worlds.”
What are microservices and how are they particularly vital to building an evolving technology ecosystem?
“When you think about the API (application programming interface) in the context of being able to take all the data that is locked up inside of that core admin system, microsystems would be the way that we could safely and securely expose that data to the point where all the various systems can speak to one another safely. If all of the systems have an API structure, you sit something in between that can orchestrate that data and thus use cases like touchless claims or touchless underwriting starts to come together and take hold. Self-service use cases are exploding as the data that was once locked in various disparate systems can now be unified by low-code and presented to an agent, broker, applicant, claimant, etc. in a way that provides value and real-time insights into that transaction or process without relying on humans. Furthermore, it saves our highly trained colleagues for much larger relationships and skilled transactions, which is a win as well and largely possible via an API and microservices strategy.
Modern data platforms are the key to unlocking the information trapped inside insurers’ existing systems. To maximize their data, insurers need to create an environment that unifies information while governing data across the enterprise. They must build toward self-service access to a unified data model.
It's incredible when you think about what it could unlock, yet it's also very difficult when you go back to the beginning: having a legacy monolithic system that does not lend itself to be open and microservice oriented. How do I further add to my complicated IT agenda to unlock that? And that's where platforms with data fabric architecture can really help insurers transform and break down data silos.”