Heffernan’s strategic approach to technology solutions

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Technology is transforming the insurance industry and changing the way brokers and insurance companies operate. From streamlining administrative tasks to enhancing the customer experience, the right technology is key to staying competitive.

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Insurance brokerages and companies acquire technology through three primary strategies: buy, build, or partner. Each has its advantages and challenges:

1. Buying: Purchasing a license for existing technology (software, hardware, etc.) from a vendor. This is usually faster but may lack customization and flexibility.
2. Building: Developing the technology in-house and tailor it for your needs. This offers the most control and tailor-fit solutions, but it's time-consuming and requires expertise.
3. Partnering: Collaborating with another company or expert to co-develop the technology. This allows shared expertise and resources, balancing control and speed, though it requires effective coordination.

Each approach has trade-offs in terms of cost, speed, customization, and control.

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When it comes to acquiring technology, Kate Grasman, Chief Information Officer of Heffernan Insurance Brokers, has a strategic approach that has been perfected by years of expertise. “I buy a lot of technology, and I like to partner, particularly with insurtechs through BTV,” she says. Heffernan has been a part of BrokerTech Ventures (BTV) since 2020. 

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Grasman started her career as a consultant, but she also worked as a product manager for Siebel Systems, which provides her with a unique perspective in managing implementations and technologies. Grasman also worked for Accenture, GE, and Clorox. “I've worked at a lot of big companies, but I was actually a customer of Heffernan. I was so impressed with the service, I wanted to work here,” she adds.

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At Heffernan, Grasman has two customers: internal employees and external clients. “I'm mostly servicing our own employees, delivering solutions they might want or need for their clients or to support their business objectives,” she says. 

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Here, she offers practical guidance on how to make the right choice based on a company’s goals, resources and market conditions.

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When to buy, build, or partner

There can be strategic value to partnering on technology, such as bringing in expertise, sharing risks, and accelerating innovation. There is also value in building a technology for a custom solution. But most of the time, buying technology off-the-shelf is the most advantageous, according to Grasman.

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“I know what it takes to build product and support product building. Believe it or not, building is the easy part. Supporting it once you've built it is the hard part,” she says. “Given that, when you’re in an industry like insurance, building technology typically isn’t a good fit. So, we’re usually buying available software off the shelf or partnering with people who will help build it.”

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Why not build? “I very rarely want to build because of the cost,” says Grasman. “Finding resources to maintain technology actually turns out to be more costly.” Grasman stresses that Heffernan is not a technology company, they are an insurance brokerage. “If I need a technology and there is nothing in the marketplace that is faster and cheaper, I would consider building in order to deliver a competitive advantage. But it’s very rare. In fact, in my two years here, we’ve only built one technology, and our roadmap is filled with 20 technologies that we're putting in place,” she adds. 

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Recently, Heffernan did a custom build of their own version of ChatGPT as a foray into artificial intelligence (AI). While the process ran smoothly, says Grasman, “Going forward, our goal is to buy AI off the shelf from insurtech partners. We recently bought Fulcrum, a technology that leverages AI to do our proposals. We’ve also partnered with insurtech through BTV for policy comparison and policy check. But most technology, we’ve had a good experience with buying. For example, we recently purchased Adaptive, which is a Workday product for our finance team, and we bought DocuSign for contract lifecycle management.”

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When it comes to partnering on technology, Grasman has simple advice. “It’s about aligning technology, the relationship, and the price. You want to solve a business need, of course, but it’s really important to connect with the partner and the team of people you're going to work with,” she says. “Also, it’s key to get pricing out of the way upfront. It can be the most beautiful technology, but if it's too expensive, I'll walk away right then and there. There’s no need to waste anyone’s time if the price is too high.” 

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Develop a decision-making framework

To adopt the right technology and avoid common pitfalls that come with acquiring innovation, Grasman offers up the following advice: “First and foremost, make sure the solutions you're delivering are what the people in your business want. Because you can have the best technology in the world, but if no one adopts it, it’s not going to work,” she says. “Number two, I think it's really important to continue to survey the landscape, really stay close to insurtechs and BTV to learn about the trends.”

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Grasman also advises insurance brokerages to do their homework upfront. “Develop what I call a business aligned architecture,” she says. “This means you determine the foundational systems that you need in place. So, what are your systems of record, systems of engagement and systems of insight? These are all important components of a business’s data infrastructure. Then, you can determine how can you use technology to really build on those systems to deliver what the business needs to run smoothly.”

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Assessing risks and benefits

At Heffernan, Grasman and her team complete a competitive analysis before purchasing technology. “When someone comes forward with a need, the first thing we do is research the technology online. I can usually find three or four technology vendors that could satisfy the need,” she says. “Insurtech is definitely at the top of that list. Then, I reach out to my network for recommendations. Next, I will complete an assessment of the technologies that will work and submit a Request for Quotation (RFQ). After that, I demo the technology with my business partners, select the two we are most interested in, and complete a scorecard for price, features, and functions. Overall, it’s a quite a structured process.” 

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When it’s time to determine if the technology will work, Grasman and her team move on to next steps: 

• Test and learns. “These are basically quick pilots to evaluate if there’s a possibility with the technology,” says Grasman. “Test and learns are small and targeted. We get a few business partners and the IT department together to see if the technology will work or if we can shape what it can do. We aren’t burdening the organization, rather, we want to learn quickly and fail fast. We probably do five tests and learns a year. If we know this technology is a go, we’ll take it to a formal pilot.”
• Formal pilots. “This can be anywhere from five to 20 people in our organization,” says Grasman. “We partner with our operations department and Leticia Trevino, our Chief Operating Officer, to navigate the technology more thoroughly. Usually, formal pilots have gone through a test and learn, or we’ve seen it in the marketplace and we know it’s going to go over well and contribute to our business.”

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How she sees insurtech evolving

When it comes to emerging technologies, Grasman believes AI is the most impactful development of the last several years. “I've been doing this for over 30 years, and I’ve seen so much change. Of course, the internet and the intranet were huge game changers. Technology outsourcing and big data were also huge developments. AI is the next wave.”

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“Given where technology is going, the emphasis will be on buying and partnering for most industry verticals,” according to Grasman. “We're not tech companies that build technology. We aren’t engineers and coders. It’s important to remember we’re in the business of insurance.”

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For accessing new insurtech solutions, Grasman recommends BTV. “I have found that the BTV individuals and partners provide such a great way to innovate for our industry, she says. “I highly recommend it for anyone who's interested in growing their brokerage or insurance company. They’ve created so much momentum within the industry.”