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The Quest...

When viewed broadly as an industry, the P&C insurance market is largely thought of as a commodity industry, with products and offerings that have become largely interchangeable and difficult to differentiate - at least for most common insurance offerings. Sustainable competitive advantage for an insurance carrier in today's market, is difficult to achieve, and comes from:

1. Being the lowest cost provider (typically as a result of systemic innovations to the company's operational platforms and processes);
2. Ability to enter new markets rapidly, by developing and introducing new products for emerging (typically more complex) insurance needs - in other words, capturing competitive advantage through innovation and speed-to-market;
3. Ability to attract new and retain existing customers, based on service and relationship management innovations;
4. Having the data to make knowledgeable decisions that drive the institutional wisdom on consistently making better risk and portfolio management decisions;
5. Critical mass and/or brand differentiation;

The few insurance carriers that have been able to solve one or more of these factors have been able to consistently drive materially higher levels of operational efficiency and service, gaining higher levels of policy holder and sales channel loyalty, and creating significantly more brand / equity value relative to their competitors.

So, why aren't more insurance carriers able to achieve these business transformations? Why are these business goals so hard to attain and such a significant barrier to entry (as well as being a huge source of competitive advantage for those that are successful at achieving them)?

The Root Cause...

Today, business transformation is not possible without software transformation - Software Is The Business™.

For decades, insurance carriers have been forced to operate within the constraints of inflexible and unmanageable legacy software infrastructure. Despite the tremendous advances that have been made in computing capability, network bandwidth and processing capacity ("feeds and speeds"), legacy software platforms have continued to be the single most intractable roadblock to transformation for insurance carriers. Business priorities such as moving from a product-centered to a customer-centered business model, or providing agents and policy holders with internet-based self-service capabilities, or even introducing new products and services in a timely fashion have continued to be stymied by old software that has been patched and band-aided over decades.

As a direct result, insurance carriers have become the poor step-children of the financial services sector. As compared with banks, asset management and investment management companies, who have been able to access standardized solutions that automate their core processes, insurance companies have had to live with aging vendor or home grown legacy software. This has put most carriers in an untenable situation, where IT has become a straitjacket for their businesses.

The Holy Grail...

Carriers that wish to transform their businesses will need to replace their aging legacy systems with a much more flexible and configurable platform to support the way in which they would like to do business going forward - otherwise they are doomed to continue living within the constraints of the legacy business models and legacy business processes that are hard-coded into their legacy operational systems.

Castek's vision for our Insure³ product suite is to ensure that we give insurance carriers (1) a modern, functionally complete platform from which to operate their businesses; (2) an open, standards-based architecture which provides the CIO with the flexibility and ability to make product and vendor choices at any time; and (3) the tools to allow the business to configure their own requirements, so that IT is no longer on the critical path to developing new insurance products or implementing new service and process initiatives.

This advanced enterprise software platform unlocks the opportunity for business transformation and sustainable competitive advantage.

With Great Power comes Great Responsibility...

Taking on a program to install a modern enterprise software platform requires a material investment in dollars and people. With success will come great rewards - and failure is not an option. The good news is that there is a platform available, which can provide incredible flexibility and choice for an insurance carrier - the bad news is that not all choices are good choices and the insurance company needs to know how they would like to operate going forward in order to take advantage of this platform.

We understand that providing this type of flexibility can add implementation complexity for an insurance carrier. As a result, Castek, along with our parent company i-flex solutions, have invested significant thought, experience and resources into reducing implementation complexity and mitigating the risks and costs that would otherwise be associated with adopting a modern platform. We have specifically designed our business model, partnership strategies, and implementation management practices to allow carriers to take up modern, standards-based, best of breed solutions in a pre-integrated and pre-configured platform, without the inherent contractual or implementation risks of committing to such a strategy.

The great news is that for the first time in industry history, P&C insurers have the option to adopt a modern enterprise software platform without the pain of integration and sourced from a single vendor. Finally !! ... there is a more rational (and much higher value) alternative to traditional legacy product offerings or internal development, without any increase in risk or cost !!