(Cerity Executive Team. L to R: Juli Benedum, VP Corporate Counsel; Tracey Berg; Craig Shapiro, VP Product & Underwriting; Dennis Dix; Mark Sturdevant, VP, Finance; Scott Grinna, VP Enterprise Program Management.)
Among the most challenging aspects of core systems initiatives are the inevitable customization of the base application and the actual implementation of the systems onto a carrier’s infrastructure. Cerity, an Austin, Texas-based startup subsidiary of workers’ compensation insurer Employers Holdings, Inc. (Reno, Nev.) dispensed with these impediments by adopting Duck Creek’s OnDemand SaaS core system implementation within a zero-infrastructure approach, and also by implementing the system’s content with no customization. The platform went live for business in under 12 months, as we recently reported at IIR. At Duck Creek’s Formation 19 conference this week in Miami, Insurance Innovation Reporter had the chance to talk with Tracey Berg, President of Cerity Services and EVP & Chief Innovation Officer of Employers Holdings, Inc., and Dennis Dix, SVP & Chief Operating Officer, Cerity Services, Inc.
Insurance Innovation Reporter: How did the Cerity initiative come about? Tracey, you were a Duck Creek customer at your last job, as CIO of West Bend Mutual. Did Employers envision a Duck Creek implementation for the new venture when they brought you on in Jan. 2017?
Tracey Berg, President, Cerity Services: I wasn’t recruited for Cerity but rather to be CIO of Employers. They hadn’t looked at Duck Creek or had a plan for a direct-to-consumer (DTC) channel. However, the time was right for a commercial DTC play. Carriers in the personal lines world started doing DTC over 15 years ago, and if you start now, it’s too late. So all big insurers have to watch when it’s likely to impact their sector, figure out how to prepare and be ready to jump in when the time is right. Dennis [Dix] and I, along with several other team members, worked together to prepare what it could look like, what it would cost, what we thought the results could be, and brought it to the board in Oct. 2017.
Dennis Six, SVP, COO, Cerity Services: We saw a confluence of several trends, including the maturation of technology, the availability of data, and the consolidation of the agency/distribution plant. There has also been a shift in demographics which has increased the preference to buy through a digital experience. Our board had been talking about it for years and believed the timing was right. In my opinion, Tracey was the last piece we needed to move forward.
IIR: Tracey, how did your experience with Duck Creek as CIO of West Bend Mutual [West Bend, Wisc.] influence selection of the vendor at Employers/Cerity?
TB: We did an analysis of what systems would be suitable, so Duck Creek was by no means a foregone conclusion. Of course, I did have in-depth experience of the technology; I have a history of a good relationship with Duck Creek and I knew this would be a good partner to get this initiative done. Duck Creek won on two factors that were particularly important to us: 100 percent cloud and the ability to answer our time-to-market needs. In other words, OnDemand and Duck Creek’s NCCI bureau templates, which no other vendor could provide. We really did take them right out of the box.
DD: We chose Duck Creek Professional Services as our implementation partner. We challenged them to think a little differently about the way they do implementation and they were able to respond very well. Before we launched we wanted to configure additional states, though not planning on going live in them at that point. We were able to configure five states in four days. It was very impressive—this was at QA and ready for production. That’s the true value that Duck Creek brings to the table out-of-the-box.
If you’re willing to stick to NCCI and templates you can really accelerate your implementation process, but it requires rigor; it requires saying no and challenging the way things are typically done. If you had legacy systems it would require saying no to institutional processes that may or may not be required. Thankfully, we weren’t burdened by legacy. New-system implementation is an opportunity to start over—a clean slate. Sadly, most organizations take their old habits and just build them onto the new technology.
TB: We were very intentional about using Duck for what Duck is good at. Implementation people are accustomed to adding custom code to a core system. They want to meet customers’ needs, so they ask to put various typical things in the requirements and it ends up being a complex implementation.
DD: During a meeting Duck Creek Professional Services asked me questions about policy numbering conventions. They asked me several relevant questions and I answered them. At the end they said, “We’ll go off and build that.” I said, “Build it? We want to implement out of the box!” They asked why I had given them all those answers and I just said, “Well, you asked!”
IIR: Tracey, can we review what you’ve done since Cerity’s launch in late Jan. 2019?
TB: When we launched we were in one state with roughly a dozen classes of business. As of the end of Q1, we were in seven states with roughly 60 classes—a 700 percent increase in states, and a 5x increase in classes. By the end of Q2 we expect to have Duck Creek configured for all remaining workers’ compensation markets—not live, but configured. We’ll still need to get regulatory approval.
IIR: How quickly can you typically turn on states once you get approval from the state regulators?
DD: Once we get regulatory approval, it’s a matter of just a few days before we can turn on a given state.