We live in an age of cheap and easy solutions, and thats not good news for the insurance technology market.
I recall seeing, several years ago, a cartoon that made the point quite well. It showed a commercial announcement blasting forth from a television set.
“How much would you pay to know all the secrets of the universe?” the announcer asks. “$100? $200?”
“But wait! Before you answer, well throw in this state-of-the-art spaghetti pot and clam steamer! Now how much would you pay?”
This is a perfect illustration of a modern phenomenon Id like to label “infomercial syndrome,” that is, the offering of an impossibly good product at a ridiculously attractive value point.
My 15-year-old son actually likes to watch infomercials, mostly because he is amazed at the hubris of the marketers and appalled at the gullibility of the buying public. He invited me to watch one such travesty recently.
Consider a certain infomercial “chef” and his fabulous set of kitchen knives. He slices and dices his way through a variety of meats, vegetables and other foodstuffs with unerring precision. Then, the pi?ce de r?sistance–the knives are used to cut holes in wallboard in order to make home repairs.
Why, such a device could save the average homeowner hundreds on power tools, while representing a bona fide threat to home improvement professionals everywhere!
Absurd as they sometimes are, however, infomercials continue to air for one very good reason–they work. And, unfortunately, the unrealistic expectations fostered by the “infomercial syndrome” may be a primary reason for a startling result found by Dallas-based researcher Robert E. Nolan Company.
Nolan surveyed 148 senior-level insurance executives, including CEOs, CIOs and COOs, from 122 insurance companies. Respondents were asked to agree or disagree with the following statement: “Technology vendors understand our business and work processes.”
Incredibly, 82% of IT-related respondents disagreed, while 61% of business-related personnel also disagreed.
Touching on the “infomercial syndrome,” Rod Travers, senior vice president of technology for Nolan, suggests there is “a continuing situation where technology is implemented or adopted with the expectation and sometimes the promise that it has best processes and best practices built in. But where the rubber meets the road, every company is different.”
Travers points out that a companys unique business model necessitates a unique way of taking care of customers. “The notion that best practices can be built in is true to a certain degree, but at a certain point, it doesnt apply,” he explains.
Sometimes, he adds, the fault may lie with the customer who has failed to understand or actualize his or her own business requirements. Companies that do this well tend to “have much better results” from software implementations, he notes. When they dont, however, “the vendor takes the rap.”
On the other hand, says Travers, when a carrier asks a vendor if a software product can solve a problem, the answer is often “yes,” even if the truthfulness of that answer is doubtful. This has the potential of creating unrealistic expectations.