ORLANDO, Fla., May 23, 2005 — Today at the ACORD LOMA Insurance Systems Forum, an insurance industry gathering held in Lake Buena Vista, Fla. May 22-24, Microsoft announced a new “experience Insurance” Initiative, designed to help insurance companies differentiate their brand, increase market share and profitability.
To learn more about how the initiative can benefit customers and why Microsoft is dedicated to this industry, PressPass spoke with Kevin Kelly, managing director of insurance in Microsoft’s Financial Services Group. Kelly is responsible for Microsoft’s vision and strategy for the U.S insurance industry, dedicated to delivering optimal value for customers and strong business results for Microsoft and partners.
Kevin Kelly, Managing Director of Insurance, Microsoft Financial Services Group.
PressPass: What is the experience Insurance initiative?
Kelly: Microsoft’s “experience Insurance” initiative integrates business-value and architectural vision into a method of interacting with Microsoft that is critical in our continuing journey toward becoming the preferred enterprise provider for the insurance industry. Essentially, it is an initiative that will enable customers to better determine which Microsoft technologies and partner solutions are best for them, by understanding specifically which areas of business improvement they are best suited for. Its primary focus is to enable us to change the “experiences” that our enterprise customers are trying to create or achieve through the development and deployment of business-processing solutions. The initiative features a wide variety of activities, including sales training, partner development programs, customer advisory councils, “experience Insurance” briefings and in-market and Web educational events.
Our customers face an incredibly challenging business environment and often find it difficult to innovate, difficult to differentiate their brands or to compete more aggressively. Our “experience Insurance” program provides an easier way to source and consider solutions that get at these issues and improve customer retention, reduce risk, drive additional revenue and reduce the cost of operations. We believe the capability to reach these goals revolves around the ability to quantify and deliver a differentiated “experience” for all stakeholders in the value chain — customers, employees and operations.
PressPass: You talk a lot about changing the customer, employee and operations experience. What does that mean specifically for the insurance industry?
Kelly: Well, we’re providing our insurance enterprise customers with the ability to assess and be prescriptive about improvements and innovations within the insured’s (customer) “experience” — the agent, broker, underwriter or claims adjuster’s (employees’) “experience” or the data-center or CFO’s (operations) “experiences.” Instead of dealing strictly in technical solutions at the end of a business discussion, we wish to engage the customer in joint decision making regarding the business value to be derived from Microsoft technologies and partner solutions. This program allows us to provide better advice and counsel to our customers on the wide array of assets at their disposal for improving their business results. The business-relationship improvements that are emerging make Microsoft a much more useful and invaluable ally in the planning and growth of our customers’ business.
PressPass: What factors did you consider when you developed the “experience Insurance” initiative?
Kelly: We took a broad look at what matters most to our customers — what goals and objectives they have, long-term opportunities as well as more immediate, market-driven realities. As markets cycle, customers are being forced to look at their businesses in a different way. Increasing regulatory compliance pressures, distribution-channel optimization, market segmentation, product refinement and customization all create tremendous pressure to improve. Microsoft is responding to these pressures by aligning our solutions, partners and capabilities around those challenges so that insurance customers can maximize their investment in our technology, reduce the cost of operations and compete more effectively in the marketplace. When customers take advantage of these capabilities, the experiences achieved can yield tremendous and much-needed differentiation.
PressPass: Specifically, what does this mean for the insurance industry?
Kelly: The industry remains paper-bound, human-intensive and highly-fragmented from a business-process perspective. Microsoft’s entire focus is on merging the necessary business applications and architectural designs into a cohesive offering that enables business-process innovation. For example; at the point of sale and service, an agency or brokerage employee is wrestling with all kinds of paper, multiple carrier Web applications, their own agency-management system, their own sales-force automation programs, miscellaneous rating applications, internal reporting interfaces; the list goes on. It is a day-to-day nightmare with respect to productivity.
To counter that, Microsoft is bringing forth technologies and partners that knit together the agency-management system with a carrier Web service and a rating service, combining that with real-time communications with underwriters or customers — eliminating much of the paper, phone calls, faxes and sticky-notes with scribbled passwords on them, so prevalent in the process today.
In other areas we are enabling complex multi-party collaboration solutions for professional financial advisors or investment professionals, utilizing real-time market data, publicly available Web services and proprietary content formats. We are merging the application interfaces, the transactions and the communications onto one XML-enabled platform and doing that throughout the Insurance Value Chain. Instead of siloed applications of yesterday we are bringing forth communities of customers and employees, all of whom have unique and new “experiences” with the applications they are using and sharing.
PressPass: What role are Microsoft’s industry partners playing in “experience Insurance?”
Kelly: Partners are central to the Microsoft strategy. Partners use Microsoft software technologies to create innovative applications that deliver enhanced, improved and innovated experiences to the customers, employees and operations personnel who use them. The industry is consuming more and more packaged Microsoft applications, and learning that they can be easily integrated with their existing systems. In fact, a recent Jupiter Research study indicated that 72 percent of the CIO’s surveyed said that Microsoft had the best interoperability story in the market. So partner applications that can be easily and efficiently integrated with existing systems make them more and more appealing for consideration over custom-built, expensive systems.
For the past three years we have been developing a family of logically connected and integrated insurance processing applications called the Microsoft Insurance Value Chain. That program has grown from a handful of insurance application partners to more than 40 member insurance solution and service providers, all working toward the common goal of providing innovative straight-through processing for insurance on the Microsoft platform using Web services, XML and ACORD standards as foundational technologies.
PressPass: What do you think customers want from Microsoft and what do partners want from Microsoft?
Kelly: Customers and partners are very much alike. They expect increased reliability, performance and business value, year-over-year, along with the innovation that we are known for. Microsoft’s commitment to research and development enables us to transform innovative computing discoveries into real-world software and application benefits that deliver in all of those areas. Customers look to Microsoft as a thought-leader in the application of software to the solving of personal and business computing challenges.
Naturally, the insurance industry will want to know year over year, how that research and engineering improvement can help them plan for future scenarios in-market and how they can remain ahead of the curve on those developments. As we develop and communicate our industry strategies, we can turn the software engineering of Microsoft and our best partners into business strategy benefits for customers. So in that way our vision and strategies are useful to help customers envision how they want their business to operate in the future.
PressPass: What are you doing to help your partners understand and better align with your vision?
Kelly: Our vision of “experience” as a filter through which applications and technologies are developed or selected is one that is easily understood and adopted by partners. In fact, they help shape it, through their own innovation using our tools and platforms. We try to deliver on three fronts regarding communications to both partners and industry. The first is traditional communications vehicles for branding and communications out-reach, so advertising, editorial content and public speaking are the first-tier of industry engagement. Following that is the use of our partner family to learn and then support our vision and messaging to customers. The Microsoft Insurance Value Chain family of partners has grown year over year and they are Microsoft’s ambassadors to the marketplace. These are the companies with whom we share technology and a common vision, in support of industry communications with our mutual customers. Lastly, we work individually with these partners, and their customers, on their architectural developments, sharing our platform evolution early and often, so that they can leverage these technologies to change customer, employee and operations experiences
PressPass: Is Microsoft taken as being credible in the Insurance industry now?
Kelly: Our focus on maturing our platform, and reshaping our customer-facing workforce to attain the credibility and relationships that an enterprise provider must have to become a preferred provider of mission-critical applications and services, is something to which we are truly committed. Customer and partner satisfaction combined with solution evidence that has grown year over year is our only measure of success. Once, we had only a handful of small partners delivering solutions to small businesses, and perhaps departmental applications inside large enterprises. Today we have over 40 Insurance Value Chain partners delivering mission-critical solutions to companies like Allstate, Allianz Life Insurance, American National Insurance Company, Balboa, CUNA Mutual Group, Farmers, Grange, Lombard, Manulife, Merrill Lynch, Mutual of New York, Nationwide, Penn National Insurance, Sun Life and UnumProvident.
PressPass: How committed is Microsoft to the insurance industry?
Kelly: Insurance enables us all to conduct our daily lives in peace. Without it, none of us could drive our cars, own real property, conceive and run businesses, or perform any of the activities that we take for granted on a day-to-day basis. This vital component of the worldwide financial services marketplace is a critical industry for Microsoft. It has the most stringent demands for the use of technology and will benefit tremendously from the proper development and deployment of our technology.
Microsoft understands this, and over the years we have increased the number of people, partners and investments made for the insurance industry in order to secure a successful future for our business relationships and our customers. The company has also created an internal group focused on understanding the long-term vision of its companywide R&D efforts and deciding how these efforts apply to vertical industries, such as insurance. The group is playing a key role in demonstrating how innovations based on Microsoft’s current and future technologies can come together to meet evolving business needs.
Just last month, Microsoft announced that it would be restructuring its U.S enterprise sales and solutions organization to become more industry-centric, that it would be making further investments and adding 10 to 20 percent more resources to its US enterprise sales an solutions organization and would be elevating the role of our industry leadership within Microsoft management.
What’s different after “experience Insurance” is announced?
Kelly: Change! Microsoft’s “experience Insurance” initiative will change the way that leaders of insurance companies view the role that technology plays in their future. Insurers have to re-evaluate the directions in-which they are headed and “experience Insurance” will enable Microsoft to play a stronger and more value-added role in that process. Our goal is to become the industry’s preferred enterprise provider and this new initiative will help us on that journey.