Nolan Perspectives

Getting Hit From All Sides

Overview
In 2007 Nassim Taleb published his landmark book, "The Black Swan." He defined a black swan as a rare, unpredictable event that has severe consequences and will later be claimed to be obvious in hindsight.

An Interview with Gary Hallgren, President, Arity

The unabridged version of this interview originally appeared in the Summer 2018 Edition of IASA’s Interpreter. It is the 44th in a series of interviews conducted for the publication by Nolan’s Executive Director, Dennis Sullivan.

An Interview with Lisa Corless, President, AF Group

The unabridged version of this interview originally appeared in the Fall/Winter 2017 Edition of IASA’s Interpreter. It is the 42nd in a series of interviews conducted for the publication by Nolan’s Managing Director, Steve Discher.

Loss Control – Hidden Opportunity

Some time ago I was interviewing an underwriting officer, and I asked him for his perspective on the Loss Control or Risk Management function. His response has stayed with me for a long time.

FinTechs are Reshaping Banking — Is Anyone Listening?

The transformation of customer needs has largely outpaced the systems banks have in place to support them. Those customer shifts have been driven by innovations in connectivity, social media, and devices such as smartphones and tablets.

The Fundamentals and Customer Experience

It’s 2017 – time for a new round of prognostications from today’s “business thought leaders.” Beware! Whether it’s business school journals, white papers, or trade magazines, new management “philosophies” are everywhere.

The Promise — and Challenges — of Digital insurance

The insurance industry is going through an unprecedented shift in terms of buyer behavior, marketplace dynamics, and technology. As a result, integrating core insurance functions with innovative technology has never been more important – or impactful.

Insurers' Growth Strategy — It's All About Results

Overview
Insurance companies today are all targeting profitable growth. There’s a buzz in today’s marketplace that one can shoot in any direction and hit their target. It’s not that easy because real growth opportunities are not everywhere.

Commercial Auto — An Old Dog Up To New Tricks
Overview
The InsurTech Effect

Paul Revere never said, “The British Are Coming.” But if he were here today, he might be yelling, “The InsurTechs are HERE!” Or maybe he’d tweet it. Either way, it would be good news because the InsurTechs are bringing innovative concepts to the insurance world and beyond.

The Steady-State Imperative

Achieving steady-state operations may not be the most glitzy goal for a business leader, but it is a very necessary step towards competitiveness – and often a very challenging one.

Rebooting Customer Experience

Insurance, at its core, is a service industry. Good customer service has always been an industry imperative. Given that backdrop, what is driving today's hyperfocus on customer experience?

EOC Validation Helps Avoid Costly Errors

Many payers have been expanding their business through additions of new lines of business (e.g. Marketplace, Medicaid, Medicare) and/or new geographies. They often find themselves driving towards very aggressive dates and, in some cases, with unfamiliar products. 

Ancillary Benefits and Persistency

Product Portfolio Management is enhanced by understanding how different benefit packages interact with Persistency of the main offering. Health Plans who are or are considering offering ancillary benefits gain from knowing the lift provided or not provided by ancillary benefits.

Four Keys to Getting Governance Right

Insurance organizations are pursuing a variety of strategic initiatives – advanced analytics, digital insurance, core system replacement, customer experience, direct distribution, self-service, omni-channel, etc.

A Blast from the Past

We all receive too much junk email. But once in a great while, something hits a nerve and I open it. Last week I received one such article.

The King Has Been Promoted

One of the more well-worn clichés in the business world is, “The Customer Is King.” I’m sorry to break the news, but that phrase is like Miami Vice and fax machines...it’s so ‘80s. The customer has in fact been promoted to Supreme Intergalactic Commander.

Speak Softly and Carry Big Data

The past few years have made clear that political organizations have become much more sophisticated in terms of leveraging “big data” and executing real-time, data-driven campaigns.

Getting Claim Costs Under Control

The P&C industry is undergoing significant challenges with increased claim severity in liability and physical damage claims. These increases are outpacing inflation and rate adequacy.

Reinventing the Bank Customer Experience

For banks, the imperative of sustaining new business growth in both the retail and commercial sectors has more variables to manage than ever before.

Branch Channel Effectiveness: One Size Doesn’t Fit All

A recent BAI report indicates that the future in branching favors banks with a dense footprint and large market share. There are also studies suggesting that branch profitability is more strategic when achieving density in markets with a growing population and increasing household income.

Strategy is not a Wish List

In the National Football League it is often said, “If you have two quarterbacks, you don’t have any.”  In business, sometimes we see companies with 15 or 20 strategic objectives built into an annual plan.  How any company can focus on more than three to five critical objectives is beyond me.  Tha

The Times They Are A-changin’

Thirty-plus years ago, Steve Jobs introduced the Macintosh at an Apple shareholders meeting by reciting lyrics from the song, The Times They Are A-Changin’. It was great theater, and it turns out he wasn’t exaggerating; personal computers have dramatically changed the world.

Thomas Edison and Henry Ford: Analytics Titans?

As an analytics practitioner, I am struck by the essential practices used by Thomas Edison and Henry Ford. These titans of industry undertook major initiatives, launched from the confines of their 21-acre winter estate in Ft.

Protecting Your Blind Side

Recently I worked with a client to analyze and solve some significant underwriting problems. Initially the company’s CEO was concerned because its loss ratios were higher than its peers’ loss ratios.

The Power of Persistency

Health Plans are Gaining Competitive Advantage with Portfolio Management and Persistency Modeling

Strategy: Be Quick, but Don't Hurry!

I am a fan of legendary college basketball coach John Wooden’s books and his “Pyramid of Success” philosophy. In particular, I have found the book Be Quick—But Don’t Hurry to be an especially handy and useful reference.

Tackling the Next Wave of Mobile

Insurers are encountering a new level of sophistication with mobile users and technologies. Much like the rapid maturity of web technologies years ago, mobile technology is rapidly evolving today. Perhaps you are tacking a Mobile 2.0 strategy, or maybe you are just getting started with mobile.

Show Me the Money

I recently watched the Tom Cruise classic, Jerry Maguire. When Cuba Gooding’s character, Rod Tidwell, had Jerry yelling “Show Me the Money!” he was really talking about results. Jerry had all sorts of promises, but Rod wanted results, and results meant a new, fat, big-dollar contract.

Hands On

During a recent business trip to New York City, I found myself looking for a Starbucks on a surprisingly peaceful Saturday morning. Of course, I had my choice of four Starbucks within a two-block radius. I chose one at random and found a few patrons there enjoying a quiet morning.

Efficiency and Productivity: Sorting Out the Stigma from the Benefits

Efficient, effective, and productive are terms that are often used to define banks that manage their customer experience at the right cost. Reactions vary when those terms are mentioned in regard to high-performing banks or in describing a performance improvement effort.

Mega-Projects Don't Have to Be Massive Problems

As a CIO, I deliberately avoided multi-year projects. But when a mega-project was inevitable, I worked to make it painless.

Outsourcing IT: Whom to Ask Before You Make the Call

Since the dawn of the Information Age, IT leaders have wrestled with where, how, and even why to outsource services. Even today, a wealth of data seems to prove that businesses are still struggling to find balance.

Recharging: A Best Practice for Every Employee

Have you ever walked past one of those airport charging kiosks for phones and thought, “Man, I wish there was one for me”? Well, I have, and in July I decided to recharge by taking a two-week vacation. For the first time in my 30-plus years with The Nolan Company, I stayed home.

The Great Exchange: Health Insurance Approaches a Tipping Point

The health insurance industry is on the verge of a major shift — one that promises to change how insurance coverage is marketed, sold, and consumed. Here’s our perspective on how the Exchanges will transform the industry — and what health insurers can do to compete.

Is Growth Overshadowing Resilience?

While the economy improves and business opportunities abound, it’s easy to forget what we all went through starting in 2008 with the economic meltdown. As we help clients hammer out business, operations, and technology strategies, we are finding many are almost hyper-focused on growth. Why not?

Opportunity to Improve Profits in a Compressing Bank Marketplace

The downward trend in the number of U.S. banks—now down to 6,805—has continued in 2014. There has been a steady decline over the past 11 years from a total of 8,108 in 2003.

Bold Claims: Unlocking the Potential in Predictive Analytics

Big data is now ubiquitous in the insurance industry, but most insurers are merely scratching the surface when it comes to effectively harnessing its value. In fact, a recent study revealed that 60% of claims data is still unstructured, and that 16% of high-risk claims are still neglected.

At Your Service: How I.T. Can Deliver Real Value

I had dinner with a couple of health plan CFOs recently, and they both voiced the same concerns about their IT spends.

Don’t Take Lean Too Lightly

Like other contemporary management models, Lean can be a powerful tool for affecting positive change. And like other theories, it has taken time for Lean to catch on — especially in organizations outside of manufacturing.

Two Great Men with Similar Views on Leadership

In 2008 I had the honor to meet Colin Powell and introduce him as a keynote speaker. In preparation I read Oren Harari’s book, The Powell Principles. It is a no-nonsense guide to leadership.

A Healthy Plan for Member Engagement

In the age of Affordable Care, individuals are playing a more active role in their own health.

Who Says Great Service Really Matters?

Recently I was on a Friday flight from Austin to Dallas, and I decided to stand by for an earlier flight. Standbys are usually a hopeless cause on Fridays, but this time it was a delightful service experience.

New Healthcare Models Are Driving Increased Administrative Expense

Over the past 20 years, health plans have made significant progress in reducing admin expenses, but new healthcare models are requiring health plans to implement new capabilities, which is driving costs back up.

Stepping Back: A True Leadership Skill

Each year, The Nolan Company conducts industry surveys to gauge the pulse of a specific industry, be it banking, healthcare, or insurance. Some are comprehensive, others are just flash surveys.

Analytics Positions Banks for Market Change

“JPMorgan Chase plans 8,000 layoffs”
“Bank of America announces another round of layoffs” 
“Barclays to cut up to 12,000 jobs”
“Wells Fargo announces 6,400 layoffs” 

Underwriting Rigor: More Important Than Ever

Emerging trends in the insurance industry, combined with an expectation of relatively flat market conditions, are spurring executives to embrace new initiatives to maintain their market share and create new means of growth in trying times.

Improving the Health and Financial Performance of Your Claims Organization

An annual personal health check (whether you think you need it or not) is a good discipline that can keep you healthy, help detect and treat problems and provide unexpected benefits. The same principle applies for the health of your claims organization, its processes and infrastructure.

Staying Effective in an Efficient World

The pace of business today and the realities of the current economy have resulted in changes and adjustments throughout the business world. With cost pressures, businesses have stressed the impact on service.

Retail Transition—How Much, How Soon, How Prepared Are You?

Retail counter traffic in banks is already in steep decline. Changing customer behaviors, including the increasing use of mobile banking, electronic payments, direct deposit and ATMs are altering the way banking is done in the today’s world.

Bank Performance Trends: The Value of an End-to-End Perspective in Consumer Lending

Nolan’s Bank Performance Study provides insight into the business of banking and changes over recent years that can have potential impacts on the future. We look for significant upward and downward trends in Key Ratios at the line-of-business or functional level.

Here and Now

It's common practice for business leaders to assemble their teams annually to review and renew company strategy.  Every company should have a clear strategy that is revised as business conditions and market factors evolve. And every company leader should be able to articulate that strategy.

Trends Captivate but Principles Endure

As trusted advisors to our clients, we must always be at the top of our game particularly when it comes to business, technology, and industry trends.

Excellence Requires Passion and Execution

There is an old saying that everyone wants to go to heaven but no one wants to die.

Who’s in the Driver’s Seat for Business Analytics Value?

I recently wrote an article concerning the need to extract business value from Business Analytics.  A reader then sent me the following question and comment: “Who should be charged with making sure this happens – is it the responsibility of the CIO, line-of-business heads, data scientist (where t

Achieving High Performance Underwriting Results

Comprehensive risk assessment – the accurate selection, assessment and rating of risk – rests at the heart of sustainable profitability.  Underwriting involves far more than simply matching premium to coverage consistently.

Nolan Bank Performance Study Trends: The Human Resources Value Proposition

The Nolan Company’s Bank Performance Study analyzes the business of banking, how things have changed over the past years and what changes may be looming on the horizon. As the results of the latest study are compiled, some compelling trends are emerging from the raw numbers.

Benefits of Maturity in Business Analytics

A recent ComputerWeekly article presents some startling figures concerning the amount of money businesses are investing in business analytics. The article1 reports that business intelligence software and services will reach $143 billion in 2016, with two-thirds of that being on services.

Solving Complex Business Problems: Harnessing vs. Adding Horsepower

Business leaders have categorized the problems confronting them as “complex” since the phrase “business problem” was coined. And those problems are getting more complex. The pace of technology, new competitive landscapes (e.g.

An Interview with Jack Salzwedel, Chairman & CEO, American Family Insurance

This interview originally appeared in the Spring 2013 Edition of IASA’s Interpreter. It is the 30th in a series of interviews conducted for the publication by Dennis Sullivan.

Efficiency Versus Effectiveness

“Effective use of technology and data can improve the quality of care and make our health-care system more efficient,” said Health and Human Services Secretary Kathleen Sebelius.

40 Years and Counting

There are many companies that have achieved the milestone of 40 years in business. We are proud and thankful that Nolan is now among them. On the occasion of our anniversary, we reflect on an interesting journey…

Health Insurance: Change in an Uncertain Market

 Earlier this year, the Nolan Company conducted a market scan of the health insurance industry through targeted interviews and reviews of public information. The purpose of the scan was to develop a qualitative understanding of what health insurers will focus on over the next few years.

Healthcare Exchanges: Change and Evolution

With its beautiful foliage and cooler temperatures, fall is a time of reflection on the achievements of the current year and preparation for the upcoming year. Reflecting on 2012, it has been a year of significant change and uncertainty in the healthcare industry.

Healthcare Change is at Historic Highs - How will Your Organization Adapt?

Adapt or die. So Charles Darwin wrote, and any shrewd businessperson knows it applies to companies as surely as it does to plants and animals.

Study: Replacing ICD-9-CM with ICD-10-CM and ICD-10-PCS

Replacing ICD-9-CM with ICD-10-CM and ICD-10-PCS Challenges, Estimated Costs and Potential Benefits
Nolan conducted a study for the Blue Cross Blue Shield Association that assesses the costs, operational challenges, and potential benefits of migrating to ICD-10-CM and ICD-10-PCS. 

What Cooking has Taught Me About Operational Changes

I am an amateur cook. I’ve learned to cook as amateurs do: by watching my father, Boy Scouts, talking with friends who cook, and reading about food and recipes. But, most important, by breaking eggs and giving it a try!

Is Your Organization Ready for Healthcare Insurance Exchanges?

Whether you're ready for it or not, the implementation date for Health Insurance Exchange is coming.

Analytics in Action: Medical Loss Ratio

Many health plans are making investments in analytics that are becoming solutions in search of a problem.  If executives don’t engage their analytic staffs on critical issues, the result can be “analytic drift.” The analytic staff is adrift when they are spending their talents—and the plan’s mone

Developing an Analytics Culture: Moving from More Reporting to More Action

It is generally accepted in many industries that the next frontier in competition will revolve around analytics. Companies that figure out how to leverage analytics will improve business performance by reducing costs, improving customer satisfaction, and understanding more clearly who their customers are and what they want to buy.

A Framework for Managing Mobile Technologies

 While it may be too early to say mobile technology will be as disruptive as the Web, there are many similarities. Consistent with the early days of the Internet, demand is coming at IT organizations very quickly and requests for deployment have outgrown infrastructure in many organizations.

Is Your Operation Ready for Mobile?

What opportunities are you leaving on the table with your mobile investments?

Balancing the Next Great Ideas vs. Exceptional Execution

At a business breakfast recently, two clients and I had a roundtable discussion sharing our thoughts about the latest and greatest ideas and experiences in insurance industry technologies, organizational constructs, sourcing options, and other topics.

Business Transformation: It's Not Just a Vision

“The last thing IBM needs right now is a vision.”

That now-famous quote was uttered at a press conference when new CEO Lou Gerstner was being pressed for an outline of his plans for the beleaguered company.

The Operations Behind the Brand

The days of marketing and operations co-existing in a contentious relationship have gone the way of payphones and paper applications. This sea change in the industry is occurring because young adults (that is, today's new customers) demand it.

Kicking the Can and Operating Model Complexity

Most of us saw it coming: massive restructuring as the U.S. Postal Service recently announced that it will close one in ten of its 32,000 offices. Efforts are under way to evaluate selling major operating locations across the United States, a move expected to save over $3 billion annually.

Defining Process Architecture: Why It Matters to Health Plan Operations

Productivity in many administrative functions in health plans has increased four- to five-fold over the last 20 years.

Will "Process" Trump "Project" in PMO?

We don’t actually expect “Process” to replace “Project” in “PMO,” but given the pervasive changes in health care, we do believe that the process management office is becoming essential. The health care industry is undergoing change of a scope and pace unlike anything we’ve seen.

Managed Medicaid Rated a "Strong Buy"

If we were rating managed Medicaid as a stock, it would be a “strong buy.” Why? Read on.

There will be sustained enrollment growth in managed Medicaid. It is estimated that the number of people eligible for Medicaid will grow by 16 million over the next 10 years.

Lessons to Remember as Merger and Acquisition Activity Increases

There have been countless acquisitions in the insurance and financial services industry already this year. Slow organic growth, unpredictable investment earnings, failed institutions, and attractive acquisition targets are escalating M&A priorities on the executive agenda.

Characteristics of Successful Mid-Size Insurers: Part 2

In the third quarter 2008 edition of The Nolan Newsletter, we published part one of a two-part discussion around characteristics of successful mid-size insurers.

Today's War Over Talent and What To Do About It

If there’s ever been a time when we were all painfully aware of the war over talent, it’s now. Nearly every client we work with faces the same challenge: that of attracting and holding on to their most precious resource—people.