Separate insurance contracts (i.e. insurance policies not bundled with loans or other kinds of contracts) were invented in Genoa in the 14th century. The first such contract dating from 1347 is a form of marine insurance indicating a clear risk evaluation approach taking into account cargo values, routes and voyage dates. This was the primitive start of modern underwriting.

Underwriting was to become more sophisticated but not until post-renaissance times. It was toward the end of the 17th century and London’s growing importance as a centre for trade increased demand for marine insurance when underwriting took a firm grip of insurance practice.  In the late 1680s, Mr. Edward Lloyd opened a coffee house that became a popular haunt of ship owners, merchants, and ships’ captains, and thereby a reliable source of the latest shipping news. It became the meeting place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd’s of London remains the leading market (note that it is not an insurance company) for marine and other specialist types of insurance.

At this stage much of the insurance market revolved around marine insurance but all that was about to change. It was London again which caused this evolution but this time in rather deadly circumstances. 1666 the ‘Great fire of London’ devoured 13,200 houses & the homes of 70,000 of London’s 80,000 inhabitants. This disaster caused Nicholas Barbon to establish the first Home & Contents insurance company paying benefits in case such a tragedy happened again. This company was named the Fire Office. Part of the paid for service was to offer the extinguishing of fires to insured homes. The company went on to be the foundation of today’s public funded UK Fire Brigade.

By 1693, the first mortality table was created using Pascal’s triangle and modern life insurance soon followed. European insurers thrived in the ensuing market but it was the colonies and their associated risks to living in them that matured the market to its present standing. Join us next time when we discover how the impact of colonial religion, slave trading & the invention of the motor car brought a modernisation to insurance.

The ancient world was a risky place.  Especially if you were a merchant and you were transporting goods. So risky in fact that one of the world’s biggest financing concepts was initiated to combat it. In 1750 BC the Babylonians developed a system which was recorded in the famous Code of Hammurabi and practiced by early Mediterranean merchants. If they received a loan to fund a shipment, the merchant would pay the lender an additional sum in exchange for the lender’s guarantee to cancel the loan should the shipment be stolen.

It was sometime later and in different empire altogether that the idea of personal insurance started to form.  Beginning around 550 BC at the time of the First Persian Empire, an insurance tradition was performed at the beginning of the Iranian New Year. The people presented gifts to the monarch. The presents were assessed by the confidants of the court. If a gift was deemed worth more than 10,000 Derrik (Persian gold coins) it would be registered in a special office. The purpose of registering was that whenever the person who presented the gift registered by the court was in trouble, the monarch and the court would help him. An ancient Persian scribe recorded at the time ‘Whenever the owner of the present is in trouble or wants to construct a building, set up a feast, have his children married, etc. the one in charge of this in the court would check the registration. If the registered amount exceeded 10,000 Derrik, he or she would receive an amount of twice as much.’

Of course, no historical piece could ever be written without mention of the Greeks and Romans. It was they who introduced the origins of health and life insurance when they created guilds called “benevolent societies” which cared for the families of deceased members, as well as paying funeral expenses of members.

Next time we will look at how the Great Fire of London led to a modernisation of insurance practice & how a coffee shop owner gave birth to the unique skill of underwriting.

Here at 3CA, we of course left no stone unturned in investigating the following insurance related statistics.  Our teams worked diligently into the night, pawing over page after page of historical records to ensure each fact stood up to the rigours of our scrutiny. We traced back each case, personally visiting many of the claimants. Verification was sought with medical centres, governmental authorities, the world health organisation, APRA, ASIC and the girl from the AAMI advert, just so you can be sure these stats can be relied on …ok, we looked on the internet for a while.

It’s said that most accidents happen at home, so let’s start with claims made in relation to accidents with household items. In Australia, last year alone, 8 people were injured by placemats, 13 sustained sauce bottle injuries, 5 were wounded by dustpans, 8 suffered as a result of a breadbin accident, 5 were hurt by sieves, 14 fell afoul of a serving trolley, 17 were treated for injuries caused by a draught excluder, 476 people were injured while on the toilet and 11 people were hurt putting their underwear on. The statistics around how many claimants were drunk and how many were engaging in ‘adult’ experimentation is as yet unknown.

How about some life insurance statistics? For the more nervous amongst you, here are some mortal odds to ponder on.  1 in 30 million people have a chance of dying by being murdered. The risk of choking to death is 1 in 120 million, and the risk of dying by tea cosy is 1 in 20 billion. There is, however, a 1 in 257,000 chance of you dying today, while reading this blog. For some perspective, you’re fifty times more likely to die in the next 10 minutes than you are to win the lottery.

Where oh where can I find statistics on toilet related injuries I hear you ask? You didn’t? Well here they are anyway. Roughly 43000 injuries caused by toilets were reported in the US last year. The total of deaths caused by toilets since records began? 2200, roughly the same as the amount of people killed by sharks.

Ok, a less dark topic?  Nearly, what’s the most dangerous sporting activity for women? Well it’s probably Russian roulette, but we’ll stay in the realm on legal sporting activities for now. Athletics? Female boxing? Judo? Rock climbing? Actually no, it is high school cheerleading that has accounted for 65.1 percent of all catastrophic sports injuries among high school females over the past 25 years, according to an annual report released Monday by the National Centre for Catastrophic Sports Injury Research. It’s seen a rise in insurers offering specialised products covering this unique activity. So constant reader, take a look at the following clips of some cheerleading related fails & please let us know of any strange claims you’ve come across…names should be changed to protect the stupid.

It might be argued that in some industries, documented methodology structure alone is enough to keep a project on the straight and narrow, but industries with a large cast of actors need significantly more attention to detail in the requirement gathering phase to ensure critical impacts are not left unnoticed.

There can be no doubt that within the multi-faceted world of both life and general insurance, the cast of roles can often run into hundreds. From customers to brokers, contact centres to claim handlers, financial accounting to data analysts, IT support staff to mail houses, underwriters to customer retention teams, the number and complexity of processes and relationships that make up a typical insurance company can feel nigh on impossible to keep on top of. Without tight requirements, scope-creep and change requests, the very real enemies of project delivery, are only a budget breaking discussion away.

Some methodologies such as Agile & Scrum, accept that change is inevitable and use strategies to anticipate their consequences. They attempt to mitigate risk by delivering working software frequently through a reliance on face-to-face communication, closely working with customers, and keeping designs simple. Such methodologies work best when customers have dedicated project resource and the size of the team is small. However, even then, more value is placed on the planning process than on documentation. In many cases analysts never complete requirements documentation and changes are made on verbal agreements.

More standard SDLC’s such as waterfall have less adaptability to change. They require robust requirement gathering workshops and are often based upon isolated departmental views. Although documentation is more thorough, the experience can be draining on clients as they interview, review, change & have little manoeuvre for unforseen issues.

That is not to say that such methodologies are of no use to insurance projects. What they require is solid practice and technique’s tailored to the specific industry they are being deployed for.
The practice methodology needs to check many boxes to truly be the definable difference between a success and failure. It should:
• Be adaptable to any type of project execution methodology, be it the Waterfall, Agile, Scrum, XP, Crystal, Lean Development, ADS or company specific project execution frameworks.
• Deploy an error free mechanism to ensure no business unit impact is left undiscovered
• Supply traceable requirements that can be identified through all phases of the project
• Define clear business ownership
• Reduce and make optimum use of business time
• Provide the business an insight to the effects of their requirements on other departments
• Nurture an democratic solution choice based on project criteria
• Provide a sustainable picture of processes to be used for future projects

All this requires an in depth knowledge of the typical insurance business teams and practices. It must have insurance specific requirement gathering tools that are simple for the business team to use and understand. And it requires a simple, step by step, repeatable process so that the quality of the requirements never falters.

The team at 3CA have developed a set of practices and techniques designed to do all of the above. It’s simply called 3CAP. Every 3CA consultant is trained in it and what is even better is they are willing to share it with you. Whether you’ve engaged 3CA to deliver your whole project, just the requirements, or need one or two additional experts to supplement your existing team, they will share the practice with you. So yes, methodologies really can work for insurance projects, providing you’ve got the know-how, and that’s exactly what you get with 3CAP.

Make sure you keep an eye out for our next insight, which will be an irreverent look into the world of insurance claims and why you have a better chance of injuring yourself putting on your pants, than you do bungee jumping!

We will stay on top of the ever evolving technical & business practice changes taking place in all aspects of the insurance market and give you some of the benefit of our experience and research. The blog will also be a great source for the latest and best insurance related white papers, software product reviews and setting the benchmark as an insurance knowledge portal.

Written by 3CA’s very own principal consultants, whose expertise in insurance projects scans three decades. We will bring you insights based on our transformation practice in all manner of insurance business lines from life to pet insurance, travel to motor insurance, home & contents to consumer credit insurance, marine to health insurance….in fact I’m not sure we’ve found a line of business one of our consultants hasn’t encountered over the years.

3CA technical experts will keep you abreast of the technical revolution that’s taking place across the market, with ideas on E-commerce trends, the digital customer experience and how to make social media work for your insurance brand and products.

Our project governance guru’s will show you some new ideas on how to ensure your project dollar goes further and stays safe. They will provide a detailed look at traditional & radical project execution framework’s and outline how to determine whether they are right for your insurance project needs. By the way if you haven’t already, you really should check out 3CAP, the insurance specific methodology practice which works with any project execution framework. It’s already making quite a difference to the way successful insurance transformation projects are being run.

Please let us know if there are any subjects you’d like to know more about or would like us to feature. We always want to make sure we cover every angle for you.

And we promise you this, by following us we will make you look at the insurance industry in a whole new way.