Guidewire’s Aspen Release a ‘Pivotal’ Step towards Cloud-Native Platform

Among the highlights of Aspen are visual product design, embedded analytic capabilities and cloud-native services such as rating, rules engines and data capabilities.

(Aspen logo. Source: Guidewire Software.)

This week Guidewire Software (San Mateo, Calif.) announced its Aspen 2020.1H, which the vendor characterized as featuring the first cloud-optimized release of Guidewire InsuranceSuite, with additional enhancements to Guidewire InsuranceNow, Guidewire Analytics, and Guidewire for Salesforce. The release exemplifies core system vendors’ evolution into cloud-based platform offerings, and it bears the influence of Guidewire’s CEO Mike Rosenbaum, a former Salesforce EVP who took on the role last fall.

Karlyn Carnahan, Head, The Americas, Property Casualty, Celent.

Among the highlights of Aspen are visual product design, embedded analytic capabilities and cloud-native services such as rating, rules engines and data capabilities. Aspen’s Advanced Product Designer, featuring automatic creation of digital screens, is designed to let insurers can create and launch new products in days rather than months. Cloud Data Access, a new Guidewire Data Platform service provides insurers secure access to their InsuranceSuite data, saving time and enabling new insights, according to the vendor. Aspen adds new Guidewire Analytics products for personal cyber and employment practices liability; Guidewire for Salesforce adds integration with the vendor’s ClaimCenter claim system for enabling a unified view of view of the customer; and InsuranceNow, Guidewire’s core suite for insurers with more limited IT resources, now has embedded business intelligence dashboards and new APIs for customer quote-and-buy capabilities.

Guidewire pitches the new release as shaped to meet the needs of insurers increasingly focused on digitally engaging with customers and agents and making insurance more convenient. “They need to innovate and launch new insurance products quickly and iterate them in market,” the vendor’s announcement of Aspen says. “Insurers must also grow their business efficiently by continuously measuring performance and testing process improvements. These goals typically require complex IT projects with insurers facing execution challenges due to a lack of IT agility. With Aspen, Guidewire delivers a cloud-optimized platform that delivers the agility insurers need to meet their business imperatives.”

Historically ‘Most Pivotal’ Release

Guidewire CEO Rosenbaum characterized the Aspen release as a new approach following 18 years of the vendor’s dedication to meeting the core system requirements of the property/casualty industry. “Aspen is a significant milestone in our cloud journey and is arguably the most pivotal release in Guidewire’s history,” he comments. “It marks a redefinition in what we mean when we say ‘core platform.’ Insurers expect that a core platform should do more than just run their core business processes. It also needs to be inherently connected to digital interfaces, take advantage of analytics capabilities, and be able to integrate data from any source. This is why we are unifying digital, analytics, and the core into one platform delivered in Guidewire Cloud.”

The debut of Guidewire Claim Center in the early 2000s more than was revolutionary because it focused on optimizing the core processes within an insurer with a code base that could be configured rather than customized, according to Karlyn Carnahan, head of Celent’s (Boston) Property and Casualty practice for the Americas. “Functionality within the full suite was focused on improving workflow and decisions for adjusters, underwriters and billing specialists rather than simply processing transactions as older systems did,” she elaborates. “However, today, insurers’ needs have expanded beyond optimizing their own internal processes and have expanded to delivering a differentiated customer experience. This requires better use of data, easier integration with third party digital solutions, and speed of deployment.”

Karen Furtado, Partner, SMA.

As an offering optimized for a cloud deployment model, Guidewire is characterizing Aspen as a redefinition of a core suite, moving beyond the vendor’s initial focus of optimizing internal processes, according to Carnahan. “Aspen is now providing the tools and capabilities needed to shift the emphasis to executing a differentiated customer experience,” she explains. “An easy connection to digital interfaces, the ability to take advantage of analytics and easily integrate data from any source, combined with a continued focus on configuration tools for rapid deployment are key capabilities required to make this transition and are the first areas of focus for Guidewire in the Aspen release.”

‘All-in’ Approach

At a time in the history of insurance core systems evolution to cloud-based, platform capabilities, Aspen represents an “all-in” approach, according to Karen Furtado, a partner with Boston-based research and advisory firm SMA. Guidewire’s release strategy includes a number of significant advancements in the area of user experience with a business user focused capability to dynamically build new user experiences, she observes.

“Guidewire’s commitment to a six-month software development release schedule provides the controls around software feature/function adoption for cloud clients,” Furtado says. “Guidewire is  following through on providing transformative solutions for the market that support the innovation and agility that insurers are looking for.”

Furtado characterizes Aspen as offering a very robust set of fundamental changes, which will be followed regularly by others. “Guidewire has referred to coming releases by name—Banff, Cortina, Deer Valley—suggesting a formalized transformation roadmap.”

In addition to manifesting the direction implied by Guidewire’s bringing aboard Rosenbaum as CEO, Aspen is one of several indications of the rapid evolution of insurance core systems in the direction of the cloud/platform model, according to Furtado. For example, during the past week Sapiens (Holon, Israel) announced it had raised $60 million in non-convertible debenture—leaving the vendor debt-free—and Duck Creek announced it had received an infusion of $230 million in new capital from new and existing investors.

Martina Conlon, EVP, Research & Consulting, Novarica.

“These developments and others show that money is coming to the foundational solutions in the market as we embrace the new era of computing capabilities,” Furtado comments. “This will include the full utilization of cloud evolving from a hosting arrangement to dynamic scaling to handle the varying degrees of capacity needed to support insurers of all sizes.”

“Insurers have been looking for core solutions that are dynamic, agile, cloud based and supportive of the future needs, Furtado adds. “These companies are examples of how the core system vendors are positioning to react and provide that future focused technology that the market needs.”

Aspen can be seen as a major first step in the transformation of Guidewire’s offering into cloud-native architecture, according to Martina Conlon, EVP, Research and Consulting, Novarica (Boston). “It’s a first logical step in externalizing certain functions from the traditional core application and repurposing and redeveloping them from the ground up in cloud-native technology,” she comments. “It’s a reorientation of the Guidewire product toward being a platform rather than being oriented to coding. Many of the product’s capabilities are moving configuration out of the hands of developers and into the hands of business analysts—which is a key part of Guidewire’s strategy.”

Aspen is good news for insurance carriers currently selecting Guidewire to replace legacy systems, as they’ll be transforming onto a cloud-optimized offering, Conlon says. “However, existing customers need to start thinking about how they’re going to get onto this platform eventually,” she cautions. “As Guidewire moves further down the cloud platform journey, the self-managed platform will start to get less attention at some point.”

Bifurcated Road Map: Cloud-Native vs. Self-Managed

Martin Higgins, VP, Research and Consulting, Novarica.

Novarica’s recent report on policy administrations and core systems more broadly noted the problem created by Guidewire’s and other vendors’ bifurcating their road map to support existing customers while accelerating their moves toward cloud-native, SaaS offerings. Martin Higgins, VP of Research and Consulting and co-author of the report, notes that, “this is apparent I the way Guidewire thinks about its road map, where the cloud-based system will get the lion’s share of the investment.”

That bifurcation will be especially notable in areas of new capabilities developed from the start as cloud-native, according to Higgins. “For example, some of capabilities Aspen’s new data platform to handle both structured and unstructured data are unlikely to make it to the self-managed version,” he says.

Aspen can be seen as the first major delivery of Guidewire’s Rosenbaum era, but Conlon notes that his appointment itself can be seen as an artifact of the vendor’s long-term strategic direction. “If you look back at when Guidewire issued its IPO and filings in 2012, they absolutely positioned them as a SaaS company,” she says. “Certainly the Aspen release is a result of Rosenbaum’s working with the Guidewire team to accelerate the company’s journey towards being a cloud platform company, and he has the experience to make them successful.”

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Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at [email protected] or (503) 936-2803.

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