Tim Crossley, London Market Sales Manager, FINEOS
My first summer job was at IBM Warwick. It was the 1970s; the office was brand spanking new and state of the art. People had big hair and loud shirts. My task was to create a similarly loud demo that showed off the first colour terminal available on the planet but in practice I spent a lot of the six weeks playing computer games. This was pre-Atari so the graphics in support of Space Invaders were non-existent! IBM Warwick was the centre of the Bureau operations in the country. Many of the larger companies (e.g. insurers) had moved off the ‘Time Sharing’ mainframe services and paid out a large sum of money to buy their own IBM mainframe computer, but there were still many smaller companies supporting their key business processes on the Bureau. They couldn’t afford the capital investment required and couldn’t pay the wages to attract and retain the skilled staff necessary to maintain and support these mainframes. Over the next decade we saw the emergence of the mid-range computer (e.g. Digital VAX, IBM AS/400), the PC Server and the UNIX Server. All these provided further choice as to where to run business applications, and more and more companies took the plunge to running their ‘own systems’.
Forty years on, are we going full circle? Salesforce has been a fantastic growth success, capitalising on the pain, anguish and underwhelming business outcomes of multi-million pound, multi-year on-site implementations. A huge range of Shared Services are now available, ranging from companies simply providing space and utilities for you to run your kit to Software as a Service like Salesforce and beyond to fully managed run and change services ‘in the Cloud’ where all the client has to do is log onto a specific website, use the system and meet regularly to discuss service levels and change requests.
In the London Market more and more insurers are revisiting their core competencies and coming to the conclusion that software development projects are not on the list. This is of course completely different to saying that London Market insurers don’t believe in the key role of technology in support of the business. The LMG Future Process Review is clear about the importance of modernisation of both process and underlying technology to address the competitive weaknesses of access and speed. No one disputes that the effort, time and costs to make changes to today’s Central Systems are too great – what do we expect from software designed in the 70s? How many of us are running cars from that decade? CLASS has served us well but what the Market needs now is a modern core claims system that provides the flexibility, choice and ease of access for all participants, with the buyer at the heart of it. It must allow insurers to differentiate themselves though claims handling knowledge, experience and service.
To conclude, the next generation of Market platform must clearly leverage both Central Services and differentiated local on-premise capabilities to meet and exceed client expectations. Just as the Bureau played a pivotal role in the 1970s, it has a key role to play in support of Vision2025 and beyond. The challenge is to bring in a new flexible, adaptable and scalable version of the Bureau that positively enhances the return on investment in local systems rather than sees them as a threat.