Coherent recently hosted an actuarial transformation webinar, sitting down with key life insurance actuarial leaders from KPMG and Actuarial Resources Corporation. While it has historically been a struggle for actuaries and IT to collaborate on large-scale projects, our transformation experts have seen positive trends in the industry and shared their advice for successful transformation.
Big aspirations are necessary to create big changes. That said, many organizations are fighting transformation fatigue. The success of large transformation efforts is often viewed as binary – it’s a success or a failure. And unfortunately, across the industry, many have been deemed as failures. This can lead to finger-pointing and strained relationships between actuaries and IT. Transformations focused on system consolidation have been particularly difficult to classify as successes, especially when systems are forced to handle tasks they weren’t designed to complete.
Strengthening the actuarial-IT relationships and gaining more success means redefining success. Transformations do not need to be defined in absolute all-or-nothing terms. Partial successes are still successes. Creating smaller, more practical transformations leads to more wins. Ben Farnsworth, Managing Director at KPMG encourages companies “to seize the energy, but make the right first steps to see the benefits.”
Executive buy-in on the vision, project plan, and timeline is critical for any transformation project. That said, the experts have seen the biggest successes when the planning process focuses on outcomes and end goals. Likewise, the panel saw many efforts fail when too much time was invested in the planning phase and things get adversarial before the real work even starts.
Sean Hayward, Insurance Go-to-Market Lead at Coherent, recommended that companies “focus on building the partnership and outcomes vs defining the entire process. Teams need to get agreement on the general principles of who should lead what but not the specific list of who is doing exactly what tasks.” It’s difficult, if not impossible, to map out every aspect of a multi-year transformation upfront, so teams should work together on taking incremental steps and constantly collaborating on defining (and refining) the phases as they go.
Watch On-Demand: Actuaries and IT: Transformation is Better Together
Project management tools should be simple, easy to update, and help teams communicate throughout the entire transformation process. If a project management tool is so confusing that it isn’t used beyond the planning phase, then it shouldn’t be used. It’s critical that the goal of project management tools be to highlight dependencies and gain joint vision – NOT used for the blame game.
Brenna Gardino, Principal & Director of Consulting at Actuarial Resources Corporation also suggested that companies think about emerging tools and technologies, such as those that enable coding to be outsourced to actuaries. “In the old way, actuaries build specs, IT builds code, and there’s a lot of back and forth. Solutions like Coherent enable actuaries to easily create the code from Excel models and connect it to IT, allowing teams to get to market faster.”
Transformations often focus on technology, but projects need to be built on people’s strengths. As Sean Hayward pointed out, “If you design a process that only you know how to run, then only you can manage it. Think about the resources that will be using the process and how they can use it.” It’s not realistic to expect everyone to learn new technologies and if you do that, you are likely creating a situation where people will build side processes around the new process. Organizations need to think about sustainable outcomes and empower the people in the process to use their institutional knowledge.
If individuals hold institutional knowledge, culture is what encourages them to unleash it. The most successful transformations are embracing an agile, iterative, fail-fast mentality. Both actuaries and IT need to accept that things don’t have to be perfect. Initial requirements are exactly that – initial. Everyone needs to be open to a culture of continuous improvement.
Our team at Coherent has valuable insights and solutions to share, and we're here to support you in achieving success in your transformation journey. Contact us today to learn more about our products and how we can help streamline your processes for optimal results.