Q&A: Guidewire CEO Mike Rosenbaum on the Launch of Aspen

The former Salesforce EVP talks about his first ten months at Guidewire, and how the Aspen release represents a milestone on the vendor’s journey to becoming a cloud platform company.

(Mike Rosenbaum speaking at Guidewire Connections 2019. Source: Guidewire Software.)

In an interview with Insurance Innovation Reporter (IIR) shortly after his appointment as Guidewire Software’s (San Mateo, Calif.) chief executive officer in August 2019, Mike Rosenbaum referred to a “watershed moment” in mission-critical insurance systems as an influence on his interest in taking on the position. Tier 1 insurers were expressing their willingness to adopt core systems as a service, and Rosenbaum, who had delivered SaaS in a horizontal industry context, believed that many of the fundamentals were the same for executing for a vertical industry use case. Guidewire’s move to the cloud, he said, “is one of the biggest opportunities in enterprise software today, and my personal experience seeing that happen at Salesforce makes me a good candidate to guide the company through the transformation.”

This week Guidewire debuted Aspen 2020.1H, which the vendor characterized as featuring the first cloud-optimized release of Guidewire InsuranceSuite, along with related enhancements to its InsuranceNow offering. IIR saw this as an opportunity to talk with Rosenbaum about the significance of Aspen to Guidewire’s voyage from being packaged software that carriers can buy and implement to becoming a service they can access—as well as how it reflects Guidewire’s hiring him to take the helm.

Insurance Innovation Reporter: The release of Aspen is one of several exciting insurance core systems stories in recent weeks. How are you settling in and seeing your work in insurance core systems in your first year in the industry?

Mike Rosenbaum, CEO, Guidewire Software: I could not be more excited about my decision to join this company and the opportunity to serve the P&C insurance market and that we’ve chosen the path that we’re on. The last nine months have been a great journey for Guidewire, and it’s been a great journey for me personally.

The most specific or the most interesting characteristic of the last nine months has just been my opportunity to get to talk to customers and get to validate what it is that we do for them and the value that we provide in that service. But also validating that the plan that we have for our future is on the right track.

I’m incredibly excited about insurance core platforms, much, much more so than when I joined. Because I think what I’ve learned is just how critical core platforms are to the business agility and the business results that P&C insurers are able to drive with them. So, I was thinking about a couple stories, such as the Canadian Automobile Association [Thornhill, Ontario], being able to expand to new regions, in days and months as opposed to years and the business that that drives for them. Another great customer of ours, Wawanesa [Winnepeg], saw 62 percent growth in written premiums within 30 days of implementing the new system on Guidewire. Or Sentry [Stevens Point, Wisc.], one of the best run IT organizations that I’ve had an opportunity to meet in my career, and to see the process efficiencies that they’re driving with Guidewire.

IIR: How does the Aspen release represent Mike Rosenbaum’s having settled into his role as Guidewire CEO?

Mike Rosenbaum, CEO, Guidewire Software.

MR: I think my contribution to this has been to ensure that the entire company is very focused on our future and that we are very clear and specific about our plans. I think that is one thing that’s different today than it was in September.

There may have been some hesitancy about where we’re headed and what we were doing. If I think back to the August/September timeframe, I think that is gone. We are very confident in our direction, and that’s based on validating that direction in those plans with customers, talking about the roadmap, talking about our plans, talking about our approach to the cloud and talking about our approach to continuing to support our on-prem customers. We are very confident at this point that we’re headed in the right direction, and our customers have contributed to that strategy.

IIR: How would you relate that confidence specifically to Guidewire’s journey to becoming a cloud company?

MR: When you become a cloud company that is updating the product every six months as opposed to once every couple of years, it’s much more important to be clear about what’s coming in the next release, and how customers need to plan for that release relative to the priorities that they’re tackling right at the moment.

When you’re upgrading Guidewire, every few years, maybe every three to four years, it’s much more important to stay focused on what’s available right now and how to accomplish a task right now. But that changes when you’re a cloud company and when Guidewire is shipping an update to the core platform every six months. And, so our confidence in that roadmap and our openness about where the gaps are and what we’re going to go tackle next—it just becomes critically important. I think that the Aspen release and launch event were just super milestones for us. I’d say this is a proof point in that new cadence, in that new approach that we’re taking to how we’re driving and leading this industry.

IIR: Could you talk a bit more about how Aspen represents a milestone for Guidewire?

MR: I would say it’s one of the most important releases we’ve ever done as a company and certainly the most pivotal. I say “pivotal” because is this is the first release we’ve ever done that is optimized around our ability to deliver a cloud service.

 

We have InsuranceSuite 10 that is capable of being run effectively in the cloud, and now we have Aspen, which is an extension to InsuranceSuite, an evolution if you will. It’s everything that is great about InsuranceSuite already, but it’s now optimized for the cloud and that includes the Guidewire cloud platform that facilitates our ability to automate. It includes cloud-native services that are designed to integrate to that solution, and it also includes integrated data and analytics characteristics. It recognizes that the cloud delivery model is the future for this industry and something that we should address directly.

Part of the picture is the mechanisms that we have today to support both our on-prem customer base in addition to the customers that are choosing to join us right now on our cloud journey. To do that we have pulled off pretty incredible architecture. We can maintain support, we can continue to add value to the on-prem or self-managed insurance customers, and at the same time, we can continue to deliver more and more value in the cloud. I really like that approach because these are very, very big, extremely important technical decisions for our customers. We acknowledge that transformation is going to be driven at each customer, based on their timelines and their priorities—and that’s part of our commitment to them. We want to be a partner to them so that when they’re ready, we’re ready. We continue to maintain the support and the trust that is the basis of the success of Guidewire over the years.

IIR: Obviously, Guidewire has a very large customer base and will need to continue to support its on-premise customers, but isn’t it inevitable that there will be an increasing focus on investing in the cloud-based version, since it’s that’s the future?

MR: One of the things that I learned over the course of my ten months with Guidewire is that the core platform of InsuranceSuite is phenomenally good. It is very complete. It is very flexible. It’s very functional. We have this customer base, and I’ve had so many conversations where they say, “We’re very happy with Guidewire. We’re very happy with what you do.” They continue to need our help with the complexity of their environment and the integration landscape. Anybody looking at the overall landscape of technology in the world can see that it’s obviously moving to cloud—it is just a more efficient model. There isn’t a single Guidewire customer that I have spoken to that hasn’t said, “Yes, we see that, and eventually we will get there.” It is no longer a question of if, it is a question of when.

And then the second thing you look at is that we’re getting all this feedback. We want to help with simplifying the environments and reducing the total cost of ownership, while improving the characteristics of how the system runs. It’s just that there is no way that we can do that without fully embracing cloud. That is just the most obvious mechanism for us to employ when it comes to creating more IT agility and reducing the complexity that these organizations have to deal with.

The architecture I mentioned before gives us the ability to continue to provide updates to InsuranceSuite 10. They can deploy it, and they can derive the benefits of it that don’t relate to cloud, but for sure there’s a percentage of our R&D investments that are specifically focused on cloud-native services and cloud capabilities like the Guidewire Cloud Platform. That’s just an appropriate step for us to take as a company and also as an industry.

The consistent conversation that I have with customers is to validate that strategy and ensure that we’re heading in the direction that they want us to head, so that when they’re ready to move to the cloud, we will be ready for them.

IIR: It’s refreshing to hear you say that insurance executives acknowledge that this is the direction of the future, but is it not important to maintain a certain pressure to pull the clients along? We have seen core systems vendors in the past suffer from pandering to their customers and being content to move more slowly than may have been good for those customers and the industry as a whole.

MR: I think you’re touching on something that is very hard, which is the challenge of optimizing a product strategy at a company as successful as Guidewire. I think that the true test of the great companies of the world is that they are able to transition, to navigate these shifts in the technology landscape. When you think about the companies that last 100 years, it’s the ones that are capable of making these shifts. I’m excited to say that I have a 100-year aspiration for Guidewire. Some our customers have existed for hundreds of years, and I hope that Guidewire exists for hundreds of years.

Doing that requires us to make hard decisions and do so openly. It forces us to make tough decisions about where we think we have to go in order to deliver as much value to this industry we serve as we possibly can. Now, we certainly don’t do that in a vacuum; we do that based on detailed conversations with our many customers and validation of our strategy and feedback about these trade-offs. We don’t do it unilaterally, but rather in partnership with our customer base. And that is the basis of every conversation I have: getting that validation and that buy-in that we are living up to everything that we promised—but also pushing as hard as we can to sort of push or pull. I hope it’s always pull, because of how much value we can deliver.

IIR: How might Aspen embody that approach to the industry?

MR: One of the things we’re doing with Aspen is redefining what it means to be a core property and casualty insurance platform. It’s not just the core business processes and a robust database system to run claims and policy and billing. It’s much more. It’s an integrated digital experience with a digital framework that’s designed to stay consistent with the changes that you’re making in the core system. It’s an integrated analytics environment, so that you have analytics ready data sources from day zero.

Every single one of these implementations involves digital and involves analytics, and it involves data. And so why are we redefining the core? We are redefining the core system to align with our vision for the future and start executing on it. Our customers see that value and when they’re ready, I’m confident that they’ll move with us.

That’s how I feel about it. It’s an exciting industry to be in and to be offered this opportunity to really become a permanent service to the industry. That’s our ambition.

IIR: What are some of the capabilities of the Aspen release that you would call out as representative of that ambition?

MR: One thing we’re particularly excited about is our Advanced Product Designer, which is something that facilitates a company’s ability to launch new products and update those products, very quickly.

Every insurance company in the world is trying to engage with customers more effectively. They’re trying to innovate with new products and they’re trying to grow efficiently. We’re trying to align everything we do around those three pillars. Advanced Product Designer helps them innovate and grow by taking new products to market more quickly.

Other characteristics of Aspen that mark it as a very important milestone for our company are the cloud-native services that are designed to augment insurance. This includes a cloud-native rules engine and a cloud native rating engine. The idea is that you can take the robust characteristics of the InsuranceSuite portfolio so that you can run them independently. You can augment and have a different change cycle associated with those external services, creating much greater flexibility and agility for the businesses and the IT departments that we serve.

The other part of it is the new digital framework and digital experiences deeply embedded in the core business processes that we support. We’ve created an entirely new digital framework called Jutro to support that. Every single core implementation is going to have a corresponding digital interface. And those two kinds of user experiences, those two windows into insurance core systems have to remain in sync. Those digital frameworks need to be able to operate very, very flexibly, and I think we’ve really hit on something that’s going to prove a very valuable part of our core system going forward.

That’s what I thought I’d highlight in Aspen, but I don’t want you to forget that we chose the word Aspen for a very important reason. It is because it starts with the first letter in the alphabet. Aspen starts with “a” and the next letter is “b” which we will leverage for the next release, only a few months away. We’re calling it, “Banff.” The point is that Aspen is just the first step in a continuing journey to evolve the system every six months.

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

Guidewire’s Journey to Cloud-Based Service: CEO Mike Rosenbaum’s Mission

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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