KEY TAKEAWAY:
--Companies are losing out on so much when every product relies on a different tech stack -- a different billing system, different contracts, different vendors and so on. Consolidation can save money. It can smooth the experience for customers who buy more than one product. And it can help organizations get more out of their customer relationships. If a customer is purchasing more than one kind of life insurance, it is easier to track their data if all of your products are using the same tech stack.
----------
We are at an inflection point in the life insurance industry, and now is the time for carriers to transform their technology and make their products more accessible to everyone. It can be difficult for large organizations to make meaningful changes to their platforms, but the short- and long-term benefits can be substantial.
Life insurance carriers want answers to questions like, What more can we learn about our business? How have the market and field response to our product lines changed? But getting answers to these questions can be difficult on legacy or fragmented systems where the data is everywhere and often unusable.
The importance of modern cloud-native technology
Most life insurance companies sell more than one product, and diversified revenue is great, but companies are losing out on so much when every product relies on a different tech stack.
Think of it like smartphone apps. There are easily eight apps you want on your phone. But you are not going to go out and buy a smartphone for each app. Yet, that is how many enterprises had been forced to set up in the initial days of legacy systems. If they have eight products, each one has a different billing system, different contracts, different vendors and so on.
Not to mention, carriers are requiring customers to interface with different platforms every time they want to consider a new product. It is also not unusual for customers to have to start from scratch when trying to buy a second or third product from a carrier, even though most of the questions are redundant. The fragmentation creates unnecessary work for everyone and a bad user experience for both customer and distributors.
There are many incentives for life insurance companies to standardize onto one technology platform. Not only can consolidation save money, it can help organizations get more out of their customer relationships. If a customer is purchasing more than one kind of life insurance, it is easier to track their data if all of your products are using the same tech stack.
See also: How to Find (and Keep) Tech Talent
The power of cloud-native technology
Upgrading technology can be a huge undertaking, and high levels of thoughtfulness are warranted. After all, making such a big change can come with some risk. In 2023, you want your software to be cloud-native. There is a considerable difference between cloud-native software versus just hosting a legacy or monolithic system in the cloud.
Cloud-native means the code is written and orchestrated in smaller containers. While this does not necessarily mean cloud-native technology is immune to bugs, it does mean that finding and fixing bugs is often much faster and easier, and not to mention more easily restricted to less severe types. With old systems, it can take days to find and repair a glitch — and time is literal money, with companies easily losing millions when they struggle with outdated systems.
FOMU: Fear of messing up
If the business benefits of upgrading your technology are clear, what could be holding people back? Many times, FOMU: Fear Of Messing Up. Change can often be perceived as more risk than opportunity. There may be concerns around distributor and client adoption. There may be concerns about internal pushback or a lack of resources.
When FOMU takes over, the easiest decision is always to do nothing, even if the way things currently “work” is not ideal in many ways. The effects of FOMU may sometimes even override potential improvements in topline revenue and bottom-line cost savings that would come from eliminating older systems and technical debt.
This is when another powerful factor may come into play: competition.
Many life, health and annuity product lines operate in extremely competitive markets, and when early adopters break the norm to offer a substantially better experience than traditional peers, there often are material movements in market share and operational efficiency, which in turn become the catalyst for change.
Ultimately, the best experience in combination with a fair product setup almost always wins, both within and outside life insurance. It is an exciting time for many companies in the space contributing to this effort, making innovative options available across the industry.
