Report Analyzes Adoption and Impact of Agile Methodology Use by Insurers
July 28, 2015
For those in the software developer and project management communities the term Agile (News - Alert) Methodology is no stranger. For everyone else, Agile software development is a group of software development methods in which requirements and solutions evolve through collaboration between self-organizing, cross-functional teams. Started when a group of developers in 2001 came up with the Agile Manifesto that outlined the need for and principles for creating a lightweight means for developing software, the goal is the promotion of adaptive planning, evolutionary development, early delivery, continuous improvement, and encouragement of rapid and flexible responses to change.
While many verticals for obvious reasons have already gone Agile, the insurance industry has been one where its use has become increasingly popular. In fact, Agile is now documented as delivering a broad range of benefits to insurers including improved quality and delivery time for IT projects. In an effort to look at the benefits to insurers, Novarica, a research and advisory firm focused on insurance business and technology strategy, is out with a new report, Agile at Insurers 2015, based on a survey of 58 insurer CIOs from the Novarica Insurance Technology Research Council.
Selected findings from the survey include:
- Midsize insurers have adopted Agile more readily than large insurers. While almost all insurers use Agile to some degree, midsize insurers use it more frequently and adopted it earlier than large insurers.
- There is little to no downside to adopting Agile for insurers, with positive effects accruing throughout IT, other business units, and even relationships to 3rd parties. Although a handful of insurers found the implementation of Agile problematic or troubling, they are vastly outnumbered by the carriers who have benefitted greatly.
- Agile is not for everything. Although most midsize insurers use Agile for more than half of their project work, most large insurers use it for less than a quarter of their projects. Some types of projects, like legacy maintenance, are not great candidates for Agile.
- Agile is not for everyone. While adopting Agile has significant benefits, it requires cultural change on behalf of business leaders to realize these benefits. For organizations in which business leaders are not willing to make these changes, it will be difficult to achieve any real benefits. But the wide adoption of Agile and the wide realization of benefits shows that this group of resistant business leaders is shrinking.
“One of the values that Agile brings to an insurer is that it formalizes regular stakeholder review and involvement with technology projects, helping to create transparency and build better direct relationships between IT and other business units,” explains Jeff Goldberg, VP of Research & Consulting at Novarica. “Even insurers who choose not to adopt an Agile approach can learn lessons from the methodology about fostering communication, prioritization, and engagement across the enterprise, helping to treat IT as an ongoing strategy asset,” says Goldberg.
There is almost an irony given the calls for insurers of all sizes around the world to transforms themselves, i.e., become more agile, that a path forward appears to be in adoption of the Agile Methodology. This like all other technology approaches for improving operational efficiencies comes with the caveats in the last two bullet points about not being for everyone or everything. That said, however, the proof is in the numbers as to the benefits when Agile is properly used.