The constraints of insurers' legacy technology have become more obvious in the days of digital transformation. These systems can no longer support customers’ demands for speed of change and omnichannel experiences.
Enter the era of ecosystem transformation.
Legacy systems create siloed processes, multi-generational technology landscapes, limited point-to-point external integration and the lack of a comprehensive customer view across various solution offerings. But, within a broader partner ecosystem, technologies such as cloud, software-as-a-service (SaaS) and low-code allow carriers of all sizes to be more efficient, productive and modern and – ultimately – move closer to customers.
When technology and business operations are closely integrated across the entire insurance value chain, carriers can innovate in ways that matter most to their customers.
Connecting Emerging Technologies
In an increasingly crowded space like insurance, and with the growing speed of digitization changing customer expectations, carriers need to constantly reassess customers’ needs and rethink the value they can bring.
In the recent past, carriers have begun to diversify their lines of business and to leverage new technologies such as SaaS, artificial intelligence (AI) and machine learning (ML) to streamline the underwriting and claims processes.
SaaS is reshaping how carriers deliver their services. From infrastructure, to solution offerings, to services and support, SaaS’ real-time nature allows IT teams to work more efficiently, building and testing rapidly and iterating faster than ever before, building a more nimble environment for insurance carriers. As a result, customers can get the latest capabilities and solution updates in a fraction of the time.
In fact, in our Driving the New Standard of Insurance global benchmark survey conducted last year, over one-third of respondents told us high operating costs are the biggest obstacle to profitable growth for insurance businesses.
Carriers that take this ecosystem approach will find themselves moving away from needing to upgrade constantly. This helps reduce technical debt and minimize both technology expense and burden. The configurability and malleability of SaaS brings speed, and it streamlines processes and workflows to benefit carriers in the long run.
Speed, Speed, Speed! – Rewriting the Rules of Insurance Operations
Insurance has always been about data. We now have a lot more of it, placing a premium on analytical capabilities. This has strained technology systems – and, eventually, when the data dictates required changes to product, it can be a struggle to achieve desired product development outcomes with outdated systems.
To address this challenge, carriers of all shapes and sizes are beginning to make substantial investments in SaaS-enabled ecosystems, enabling operational agility and efficiency in the product development and deployment cycles.
How could this be done? An insurance ecosystem brings together a close integration of analytics, computing, data, mobile and security from different sources and partners, allowing even small and medium-sized carriers to benefit from the nimble infrastructure and emerging technologies. This gives them a leg up to compete in the fierce insurance marketplace, especially in the lines of personal auto, homeowners and small commercial.
When built into carriers’ core systems, this approach supports carriers’ business strategy with the ability to enter new markets, and deliver new products more effectively and efficiently. This allows insurance CIOs and IT professionals to focus on the overall business operations and concentrate the resources on product innovations to address customers’ evolving needs.
See also: Designing a Digital Insurance Ecosystem
2022 Keywords in Insurance – The Experience Economy and Personalization
Customer expectations have changed drastically in the past two years. An omnichannel experience is a key driver in customers making insurance purchase decisions. Fast-paced insurtechs and startups offer digital customer experiences and convenience that many carriers aspire to.
The delivery of experiences includes multiple layers – from data and technology to partners and ecosystem. Getting this right requires aligning these different layers to determine how they can be optimized for customers.
When it comes to data and technology, insurance is at a unique position where customer data is readily available through claims history and the underwriting processes. How data is used is arguably the most critical factor in how well a carrier meets customer expectations and improves the overall process. Data management and analytics tools can help carriers take advantage of new customer touchpoints and make sense of what customer data is telling them.
Partners and ecosystems, on the other hand, help fill the gaps of insurance offerings. By leveraging the innovative products and services from partners and external resources, insurance companies are able to improve claim accuracy and reduce processing time. This helps improve the customer experience.
However, the increased need for digital engagements doesn’t mean that the role of traditional agents is eliminated. Agents, carriers and partners work seamlessly together as a team with each being a critical element of the insurance ecosystem.
Final Words
The ecosystem model is the way forward for the insurance industry.
It empowers technology departments by getting them closer to the end customers, positioning them as supporters of business strategy as carriers enter new markets or reach new customers. The model also enables technology departments to play an integral role in the efficient and effective delivery of new products, allowing companies to move with incredible speed and agility in this crowded space.
