Rapid technology advancements are reshaping the insurance industry, and forward-looking insurers are focusing on continuously evolving core systems to meet fast-developing market conditions. Core transformation not only changes how insurers adopt, deploy and maintain core systems, but also introduces new types of risk into all phases of a core system’s development lifecycle.
That’s why testing complex systems can no longer be considered a development afterthought. To minimize risks and associated costs, insurers must shift accuracy, performance and testing processes to making a dynamic and ongoing quality assurance (QA) strategy.
In this series of three blogs, you’ll gain actionable insights into how insurance firms are accelerating deployments by modernizing their QA approach.
This first blog discusses trends affecting QA and best practices to consider. Subsequent blogs will dive into the merits of how insurers can modernize QA with application-specific testing and, finally, supply real-world tips from insurance modernization leaders - NJM and Pekin.
Factors Driving the Seismic QA Shift
During our recent insurance QA modernization webinar, Novarica’s Executive Vice President of Research and Consulting, Martina Conlon reported that 60% of mid-sized P/C insurers are involved in a core systems replacement. In tandem, insurers are developing and modernizing their QA capabilities. Further, Conlon identified the following trends that are impacting how core systems testing and validations are conducted in recent times.
- Rising Volume and Complexity of IT Projects. Multiple competitive forces are placing pressure on traditional carriers to come up with new products/solutions and embrace new distribution channels, technology platforms, and data sources. To do so, insurers require new processes that are more streamlined, efficient, digitalized, analytics-driven and, moving forward, more AI-assisted.
The increasing demand for business efficiencies is resulting in more complexities at the core as well as a greater volume of application rollouts that QA teams must support. In addition, validation techniques for AI capabilities and machine learning algorithms for predictive modeling are making the traditional QA process of creating test cases obsolete. Instead, QA must now validate solutions that are continuously evolving, leveraging AI.
- Increased Utilization of Microservices Architectures. To be successful in the emerging ecosystem-driven marketplace, IT applications are being increasingly enabled by APIs and microservices. This trend offers insurers an opportunity to explore new types of partnerships, such as incorporating InsureTech offerings. However, with microservices architectures come more moving parts, innate points of failure and potential security vulnerabilities, all of which need to be thoroughly verified and validated.
- Constrained Testing Windows Due to Modern Software Development Practices. In recent years, the process of developing and delivering applications has changed dramatically. Modern software development relies on adopting Agile and DevOps practices, while combining microservices to build new solutions (rather than developing everything from the ground level) and embracing continuous integration/continuous delivery (CI/CD).
Each of these practices significantly accelerates time-to-market for new products and capabilities, helping insurers progress from the industry’s traditional twice-yearly releases to multiple releases every day. Naturally, this reduces the overall time allowed for validation while making testing even more vital for releasing applications that perform as intended, reducing the potential risk of failure.
Best Practices for QA Modernization
Successful modernization of QA requires a shift in mindset. According to industry experts like Conlon, it’s obsolete to treat QA as a defect management function that’s relegated to the end of a development cycle. Rather, insurers must consider QA as a strategic function that ensures customer satisfaction, implementing the following best practices.
- Establish a QA Center of Excellence to create a quality-oriented culture throughout the enterprise. Critical steps include dedicating QA resources at a project’s inception, using application-specific testing whenever possible and establishing feedback loops to share testing results with developers, business analysts, project owners and any others associated with the project.
- Embrace “Shift Left” which is now SOP in the software development at large. Shift Left is a practice that initiates testing as early in development as possible. That’s because the longer a project progresses, the more expensive and challenging – the errors are to resolve.
- Retain the Best of Traditional Testing to maximize the QA processes and outcomes. This includes, but is not limited to, adding technical expertise to QA teams, incorporating test automation into project definitions and building dedicated performance and security testing teams.
- Automate aggressively and systematically as test automation is now a development success factor. Prioritize test automation based on strategic goals and organizational readiness. Plan to automate all forms of testing, including build verification, smoke and regression tests, which require multiple tools. Over time, the tools-to-be-used can be standardized, but the near-term goal is automation.
- Evaluate and Leverage Solution Providers and Partners as they have already honed the expertise and obtained the advanced test automation tools required. However, the quality of tools and technologies provided by solution providers and partners needs to be assessed to learn if it matches the culture that an insurance firm wishes to build internally, as this is critical to achieving QA modernization goals. Also, insurers must make sure that solution providers and partners are rigorously measuring their own quality and can provide access to data demonstrating a continuous quality evaluation and evolution.
When to Do it: Now!
As Conlon points out, a dynamic QA strategy is a significant differentiator for achieving core systems transformation success. Insurers that are effectively gaining competitive advantage, while simultaneously reducing risk, are those implementing continuous testing, forming testing centers of excellence and, most importantly, building a quality-driven culture with QA practices infused throughout development and production lifecycles.
To learn the key considerations required to establish an effective QA strategy, see our next blog in the series - Application Specific Testing: An Essential QA Practice. And, for real-world perspectives from two well-known insurers that are benefiting from modernizing their QA practices, check out the final blog in this series - QA Modernization Success: Insights from Pekin & NJM.
You can also view the webinar, moderated by industry expert Anthony O’Donnell, Learn How Pekin Insurance & NJM Insurance Achieved Quality with Speed in Their Core Implementations.
Learn more about how we can help you with modernizing your QA by visiting our QualityLeap practice.