Novarica recently carried out a study to examine the current state, plans, and impact for agile methodology use at US insurers. Fifty-eight insurance CIO members took part in the study. Agile development frameworks were adopted by the insurance industry around 8 years ago, with it fast becoming the main methodology for implementing claim systems.
Agile methodology is a multi-phase product development framework. At the start of each phase, or sprint, a meeting is carried out to determine the priorities for the team over the next sprint. Each sprint cycle lasts between one and four weeks, allowing the team to regularly realign priorities. Brief daily meetings allow the team to keep in regular contact, track progress, and solve problems as a team.
Midsize insurers have more readily adopted agile methodology, compared to larger insurers. There are a number of reasons that larger insurers don’t adopt this methodology as well as their smaller counterparts;
1. Legacy system upgrades don’t see the benefits of this type of implementation methodology compared to the waterfall.
2. A change in mindset and company culture is necessary for insurers to adopt this type of methodology. Larger insurers often have fragmented IT teams, making it difficult to implement a company-wide agile approach.
3. Projects dependent on end-user feedback are more likely candidates for agile development framework.
As mentioned in a previous blog post, at ClaimVantage our developers use a scrum methodology to implement core claims systems. Scrum is a multi-phased, agile software development framework for managing product development.
Insurers who have implemented an agile approach to implementation have voiced the following as having a positive impact:
- Ability to deal with changing priorities
- Quality of delivered project
- Implementation deadline
- Ability to predict delivery rates
- End-user satisfaction with delivered projects
- Relations between IT and other Business units
- IT job satisfaction
The study determined that there is no downside to adopting an agile development framework, with positive effects accruing throughout IT, other business units, and even relationships with third parties.
Learn more about agile development in claims transformation projects here.