Guidewire creates community-based contextual insurance insight from claim system data
Rumpelstiltskin is the fairy tale character who could spin gold from straw. Guidewire, a very real property and casualty (P&C) insurance core system vendor, spins contextual insurance insight from transactional core system data. Core systems enable insurers to service customers, bill and collect premium, manage claims, and acquire business. Guidewire Live, which Guidewire launched in October 2012 initially for its ClaimCenter insurance clients, is an opt-in client network that connects people, data, and tools, providing functional-role-based, near-realtime, contextual business insight at the touch of an app. It is an innovative approach to leveraging core systems because it repurposes a transaction system into a cloud-based set of targeted information streams. Ovum believes that Guidewire Live provides Guidewire with a new market of information-driven app services to exploit, potentially stronger client retention, and heightened visibility of P&C insurance company information requirements.
Continually improving core system products and services is not sufficient
For decades, core system vendors have invested resources in making core systems easier for insurers to use, redeploying them with new technology, expanding them to support other insurance lines of business, and offering additional hosting choices. In short, they have stayed within the boundaries of continually improving the transactional capabilities that insurers need to keep their companies operating. A growing number, including Guidewire, have partnered with vendors offering business intelligence capabilities in order to provide insurers with the means to make better underwriting, claims, and marketing decisions. Ovum believes that although core system vendors must necessarily continue to improve the core systems they sell to P&C insurers, Guidewire’s new product demonstrates that this is not sufficient to create additional value for insurers from their transactional systems.
Guidewire leverages the culture of “sharing and comparing,” the acceptance of apps, and its global ClaimCenter customer base
Guidewire told Ovum that it was driven to create its Guidewire Live product by constantly hearing that P&C insurance clients want apps that enable them, for example, to benchmark themselves against competitors or determine their loss exposure to certain weather events, such as hail storms.
To create the app-enabled, cloud-based Guidewire Live product, which currently works on an iPad or via a browser, Guidewire leveraged several factors:
- the social-media-driven culture of “sharing and comparing” (although insurance company client data is anonymized)
- the rapidly increasing acceptance of apps
- the fact that all 130 ClaimCenter clients globally use a single data model with shared definitions.
Guidewire has also added tools to analyze and visualize the results of launching the apps, and information from third-party sources, such as map data from Google Maps and weather data (hail size and location) from a weather information provider. Guidewire told Ovum that it continues to determine what other third-party data to add to improve the Guidewire Live product.
Ovum sees a growing portfolio of apps in Guidewire’s future, beyond the first five
Guidewire Live currently has five apps. Most of these have different filters (e.g. for line of business, coverage, exposure type, location, and timeframe), and maps on which users can zoom in on their required country, state, and zip code. The five apps are:
- Compare: This uses transaction-level reserving, indemnity, and expense information to create benchmarks built from aggregate (and anonymized) client data.
- Contrast: This overlays client data and US Census Bureau data on a Google Map to identify problem areas or opportunity areas.
- Before & After: This enables clients to evaluate the impact of external events (such as new regulations) or internal decisions (such as new product introductions) before and after any given time period rather than a standard accounting period. Guidewire told Ovum that this app effectively enables insurance companies to benchmark against themselves.
- Claim Canvas: This provides the ability to visualize and filter a carrier’s data on a map at any given moment. Specific weather data (initially hail location and severity) adds a contextual layer that enables insurers to send appropriately skilled adjusters to the affected location, and helps insurers to identify potential fraud more effectively.
- Connect: This enables clients to connect with their peers in the Guidewire Live community. It is directed by community members and moderated by Guidewire, and it is critically important because it provides Guidewire with realtime visibility of P&C insurance client challenges.
Ovum believes that a reasonable roadmap of future apps should not be limited to ClaimCenter, but also driven by insurance client information from other Guidewire core system components such as PolicyCenter (for density of risk analysis) and BillingCenter (for flagging late payments).
Ovum expects similar offerings from other vendors and P&C insurance companies
Ovum expects other core system vendors, from CSC to Cover-All Technologies, to launch similar client-oriented apps. Ovum believes that P&C insurance companies with the requisite IT skills and a sufficient number of policyholders should consider creating a portfolio of similar apps to be used by their own employees and insurance agents.
For vendors, partnering and creating a set of capabilities is like creating a Lego brick model. A more fluid approach is creating instantly on, cloud-deployable apps like those of Guidewire Live; these apps are seamless mashups, and user communities can share and comment on them.
Barry Rabkin, Principal Analyst, Insurance Technology
Business Trends: North American Insurance Technology Investment Strategies, IT004-000345 (October 2012)
“Guidewire: 10 years old and going public,” IT004-000239 (August 2011)
The Adaptable Insurer: Oxymoron or Opportunity? IT004-000225 (January 2011)
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