Over the last three years, Oxbow Partners has helped several brokers, MGAs and carriers select new core insurance systems. One of our points of differentiation is that we know the full spectrum of platforms across the market including the long tail of next generation systems – the systems that our clients probably haven’t heard of but which could be more suited to their needs than the global titans.
Our process starts with a broader field than one may expect (selecting widely from our database of over 250 providers) but we complete the process faster than traditional vendor selection approaches.
We have developed ‘agile procurement’ methodology which balances robust analysis with pragmatism and speed. This blog summarises our eight principles for platform selection.
- Ensure non-obvious vendors are included in the process: Established giants (e.g. Guidewire) are successful for a reason – rich functionality, experience of working at scale, etc. However, some new systems can hold their own against the established names, especially when the scope is narrow, and their capabilities can evolve quickly from year to year. Don’t assume that your universe is limited to the four names you know.
- Be clear on the ‘showstopping’ requirements: Incumbents are often bad at being disciplined about what’s a showstopper and what’s a nice-to-have. Criteria are retrofitted around biases as processes evolve. Force your team to be objective from the start. This discipline will save headaches when evaluating systems later in the selection process; what will you do when all preferred systems fall done on one your many ‘mandatory requirements’?
- Use the ‘showstoppers’ to make early eliminations: People tend to want to know everything about every system. If a vendor can’t hit a ‘showstopper’ requirement, eliminate them quickly – don’t keep analysing them to balance up the volume of analysis between your shortlisted vendors.
- Be precise in your questions to vendors: For an RFI or RFP to be useful you need to be precise about your requirements so that vendors cannot fudge the answers. For example, don’t just say that you need multi-currency functionality, but identify your ‘showstopper’ requirement so that the vendor can be forced to answer a closed, no-nonsense question.
- Move off paper quickly: Demand more than PowerPoint and planned demos. We recommend asking around (e.g. speak to experts and to the vendors’ existing clients), taking vendors up on offers of free trials, and (most importantly) insisting that vendors run short POCs that you control. If something doesn’t feel quite right, ask more questions and demand more evidence. We have seen demonstrations by vendors that turn out to be mock-ups rather than the reality of their core system capability.
- Understand vendor specialisms: Many vendors claim to cover the whole value chain (i.e. broking, MGAs, underwriting) when in fact their system is only optimised for one value chain area. Quickly cutting through vendors’ marketing will save you time and allow you to focus solely on those vendors that can meet your specific needs.
- Balance fact and (expert) gut-feel: Wholly fact-based assessments of technology vendors can lead to spurious precision and odd or incorrect decisions being made. We have seen several selection processes where, due to sensitivities in the weighting factors, the ‘winning’ vendor clearly is not the most appropriate solution for the client. Whilst we recommend a healthy dose of fact-based assessment, it needs to be balanced with common sense, reason and to a certain extent expert-led gut feel.
- Find an expert: Be conscious of what you know about and what you don’t and find ways of filling your knowledge gaps. One of the main reasons clients ask for our help is that we invest time and effort into understanding the insurance vendor market in-depth.
How we can help
The Oxbow Partners technology practice has advised clients on systems in the UK, Continental Europe, Australia and Asia. We use a database of over 250 insurance systems as the starting point and cover both policy administration and claims.
Clients value our team’s domain expertise, network in the insurance technology community, and our genuine impartiality in the process. We do not have commercial relationships with vendors and we are not an implementation partner for the large systems.