Car insurers will send you a renewal notice a month before your insurance is due to expire, giving you the chance to accept or decline coverage. Thus, if your insurance renews February 1, you will get a notice dated January 1. Typically, your premium will increase if you have had an accident the previous year.
But what happens if you have an accident on January 15—between the time your renewal notice goes out and your renewed policy goes into effect? At one insurer I worked with, if you had an accident during that time, your premium would not increase for 13 months. If information was shared in real time between the claims department (to which people reported accidents) and the sales department (which calculated clients’ premiums), the company could “catch” those in-between accidents. A simple (and inexpensive) systems fix would have allowed the increased premium to be collected an entire year earlier.
The problem was that what was a priority for one department (sales) was not a priority for another (technology). The systems fix required only a $10,000 spend and so was low on the list of technology priorities. But when the spend was finally made, the reward in increased premiums was greater than $500,000 a year.