(Guidewire CEO Mike Rosenbaum speaking at Connections in Las Vegas. Source: Guidewire.)
Guidewire CEO Mike Rosenbaum kicked off the company’s annual Connections user group and partner meeting in remarking that the meeting was, perhaps, “a first step towards getting back to something resembling real-life or post-pandemic or living with the pandemic.” Connections 2021 took place from Nov. 1-4 at the Aria Resort and Convention Center in Las Vegas.
During his address, Rosenbaum discussed Dobson, Guidewire’s fourth release of its cloud platform, as well as the launch of Guidewire Live—a suite of analytics applications to support decision-making across the insurance lifecycle; Guidewire GO—the company’s latest product creation application, enabling faster launch of products and download of prepackaged lines of business from the Guidewire Marketplace; and Micro-BOP, a solution to support launch of innovative small business products.
“I think the most interesting thing about it for me is how quickly things changed—it was like overnight,” Rosenbaum continued in his introductory remarks. “It happened very quickly, and it forced us out of the rut, so to speak. It forced us to change our habits very quickly and dramatically caused everything to be changed.”
The impact of the changes caused by the pandemic led to reflection on one’s purpose, Rosenbaum said. “I very often questioned over the past couple years like what the hell am I doing this for. And I think for a lot of us at Guidewire, it caused us to really think deeply and assess what it is that we are really doing in all this work, and all this effort, and this sort of struggle that we put in to run this company as effectively as we can to serve you.”
Rosenbaum reflected on the importance of improving the insurance industry, and the commitment of Guidewire’s personnel to doing so. He added that it was also about enjoyment. “For me and for a lot of us, this goal of insurance innovation, this mechanism providing a platform you trust to innovate, that is fun,” he said. “That’s incredibly motivating, and the reason it’s incredibly motivating is that insurance is this magic thing that causes almost everything in the world to get better.”
Digital and Data Trends
Elaborating on the insurance industry’s need for innovation, Rosenbaum spoke of the constantly evolving demand of consumers for effective digital interaction with companies. “The expectations people have is astounding, and it creates quite a pressure on all of us and creates quite an opportunity actually for all of us to differentiate ourselves,” he commented.
In addition to the ever-changing digital demands of consumers and business partners, Rosenbaum referred to two emerging data-related trends. He alluded to an unprecedented change in the potential to gather data and apply analytics to every step in the insurance value chain. “This is quickly becoming something that is not really an opportunity, but more a necessity, more table stakes,” he said. “This idea that every single step in every single process in your organization can be improved, can be informed, can be sped up, and can be optimized through better and more effective leverage of vast quantities of data and models to analyze and make predictions across every step in your life cycle.
Rosenbaum added that the industry was at the beginning of a transformation caused by the potential to leverage artificial intelligence and machine learning to drastically improve the operational efficiency of companies.
Insurance Gaps as Industry Growth Opportunity
Rosenbaum offered what he called an outsider’s perspective on the relatively lack of discussion about the potential for growth in the insurance industry. When he brings up the topic, he said, his interlocutors talk about protection gaps between economic losses and insured losses. He then spoke of three examples of gaps.
The first concerned cyber risk, which Rosenbaum said constitutes a $1 trillion gap between economic and insured losses. He referred to Guidewire’s Cyence product for helping inurers to estimate cyber risk, and he reported a strategic relationship between S&P and Cyence, saying that, “the ability to predict financial risk associated with cyber is just going to become more a part of the way that we talk about the economic and financial viability of companies.”
Rosenbaum then noted that 40 percent of businesses in the U.S. have no insurance. “Now there’s a very vibrant line of business, this is growing, there’s dynamics involved here, and you see all kinds of innovation in the industry around closing this gap and taking advantage of this opportunity,” he said.
In his final example, Rosenbaum talked about closing a $200 billion insurance gap associated with catastrophe-related losses. “Closing that gap is going to be done through insurance innovation,” he said.
Systems Complexity and the Journey to Cloud
Rosenbaum then spoke of Guidewire’s role in reducing the historic complexity of insurance systems. “We have a core system that can enable you to do anything you need to do in order to modernize,” he said. “We have a vision for how that connects to data analytics, a digital platform, and an applications ecosystem that I truly do think is unique.”
Rosenbaum said that the biggest step Guidewire has taken since its founding in 2000 has been transforming the entire company into a cloud service. “We’re very proud of this and our Dobson release, the fourth release in our cloud cycle. Every six months, the system keeps getting better, seamlessly allowing you to upgrade, be more agile, and increase your innovation.”
Currently 25 percent of Guidewire’s customers have begun their cloud journey with the firm across both the InsuranceSuite and InsuranceNow core platforms, Rosenbaum reported. “We’re not going to rest until that number gets to 100, and we’re not going to force anybody to move,” he said. “We’re going to do it on your timeline.”
Discussing Guidewire Live, Rosenbaum noted that the new application suite was built on multiple acquisitions. “We are incredibly excited about what I think is a very transformational vision for where we will head with data and analytics,” he said.
Rosenbaum characterized Guidewire Go as the “next logical step” in the company’s Advanced Product Designer (APD) application. “It enables you to download pre-packaged lines of business from our Marketplace, to enable you to launch insurance products faster on our platform,” he said. “It’s a very exciting idea, and we’re going to show how when using APD, you can leverage this technology to go faster.”
In reference to Micro-BOP, Rosenbaum remarked that during the last major release, Guidewire announced a solution for usage-based insurance. “We hope and expect to be able to launch a new solution every release, every six months, and this release we’re launching support for Micro-BOP, which enables you to deploy a complete solution across the entire suite in as fast as 12 weeks,” he said.