Earnix Blog > IT
Overcoming the Perceived Challenges of Insurance Technology Adoption
Earnix Team
May 25, 2022
- IT
Many insurers continue to put off the decision to adopt new technology today. Common reasons include the view that the implementation will be too difficult, the risk of failure, or the fear that the solution won’t provide enough of an ROI. Yet instead of continuing in with the status quo, these companies can proceed with confidence.
The entire insurance industry has been notoriously slow to adopt new technologies. As recently as 2020, only 44% of insurance agencies reported that they had adopted digital technology, a trend that continued during the COVID-19 pandemic. This conservative approach may be due to internal teams thinking their existing systems and workarounds “get the job done,” taking a wait–and-see stance to new technologies, or even not wanting to invest budget in new products and systems.
There is also another myth related to technology adoption: integration. Many companies may have suffered through a bad experience with past projects and now think that new systems will be too hard to deploy, integrate, and manage.
All of these concerns are shared across the industry. According to the Deloitte Center for Financial Services 2022 Insurance Outlook survey, the top three technology challenges facing insurers today are a reliance on legacy systems, complexity of implementation, and technology that is not mature enough.
While the concerns above are valid – especially when based on past experiences or by evaluating their current tech stack – it is time to move beyond them and consider implementing new technology that is proven to deliver real results.
In fact, research from McKinsey & Company found that 89 percent of insurance executives expect to see a significant acceleration in digitization while also anticipate a further shift in the mix of channels. Additional research found that digital transformation is a top priority for 93% of insurers looking to meet evolving customer needs.
If your organization is looking for solutions like these, there are a number of reasons to be optimistic.
The first reason is that the most effective solutions today, such as Earnix, streamline the entire insurance operation by combining pricing and rating – all through an agile and composable solution. This includes innovative new capabilities such as data analytics, machine learning, IoT, and artificial intelligence.
For example, the use of these combined solutions lets insurers collect much more data from IoT devices, use analytics to add intelligence, and make better business decisions.
Additionally, today’s cloud-based solutions can be implemented extremely quickly, giving insurers an advantage over other enterprise strategies and deployments that take years to install and use – if at all. Now, you can instantly deploy new pricing and personalization strategies and deliver real-time responses required for today’s digital channels. These deployment experiences deliver more than speed to market. They also allow internal teams to focus on selecting the optimum deployment timeframes and channels to meet business KPIs.
The most competitive insurance platforms will offer the most flexible architecture possible. For example, these solutions should allow easy API integrations instead of forcing pricing and IT teams to handle the data, upload it into additional systems, and then perform manual troubleshooting work to fix various issues. Any solution that lacks API capabilities will inhibit the ability to deliver personalized products to market.
The insurance rating engine software solution should also deliver the ability to work with multiple data types and modeling tools within the platform. This gives pricing and product teams maximum flexibility in working with different types of data using their own preferred tools and approaches.
The entire insurance industry has been notoriously slow to adopt new technologies. As recently as 2020, only 44% of insurance agencies reported that they had adopted digital technology, a trend that continued during the COVID-19 pandemic. This conservative approach may be due to internal teams thinking their existing systems and workarounds “get the job done,” taking a wait–and-see stance to new technologies, or even not wanting to invest budget in new products and systems.
There is also another myth related to technology adoption: integration. Many companies may have suffered through a bad experience with past projects and now think that new systems will be too hard to deploy, integrate, and manage.
All of these concerns are shared across the industry. According to the Deloitte Center for Financial Services 2022 Insurance Outlook survey, the top three technology challenges facing insurers today are a reliance on legacy systems, complexity of implementation, and technology that is not mature enough.
How Did We Get Here?
For example, many insurers face some or all of these issues:- Manual processes: In one way or another, most insurers still rely on manual approaches (e.g., manual data entry or pricing model updates) or paper-based processes. These approaches create an environment that is difficult to envision—much less a modern pricing and insurance rating software solution.
- Siloed systems, teams, and processes: So many tech architectures grow over time by cobbling together various third-party systems and specialized applications. These processes are never as easy as they should be, and most IT teams probably remember the process as being painful enough that they may be reluctant to add more. In other words, if it ain’t broke, don’t fix it.
- Lack of digital solutions (or vision): Similarly, these overly complex architectures can’t generate enterprise-level value or provide innovative new experiences customers crave. Insurers know they need to take advantage of cutting-edge new technology, but they don’t know how to start when it comes to addressing a monolithic core architecture.
- Misconceptions about time and cost: Whether real or perceived, concerns about time and cost continue to stall decisions to implement new technology, even when internal teams know it’s the right decision. While some vendors’ deployments are extremely expensive and lengthy, this doesn’t have to be true across the board. Many providers’ implementations are extremely fast and provide near-immediate time to value.
While the concerns above are valid – especially when based on past experiences or by evaluating their current tech stack – it is time to move beyond them and consider implementing new technology that is proven to deliver real results.
Don’t Delay Insurance Technology Adoption
Let’s face it: The entire industry is now changing. Led by market investments, disruptive new insurtech startups, and game-changing new technologies, the entire industry is now embracing digital innovations.In fact, research from McKinsey & Company found that 89 percent of insurance executives expect to see a significant acceleration in digitization while also anticipate a further shift in the mix of channels. Additional research found that digital transformation is a top priority for 93% of insurers looking to meet evolving customer needs.
If your organization is looking for solutions like these, there are a number of reasons to be optimistic.
Modern Solutions Eliminate Integration Concerns
The first reason is that the most effective solutions today, such as Earnix, streamline the entire insurance operation by combining pricing and rating – all through an agile and composable solution. This includes innovative new capabilities such as data analytics, machine learning, IoT, and artificial intelligence.
For example, the use of these combined solutions lets insurers collect much more data from IoT devices, use analytics to add intelligence, and make better business decisions.
Additionally, today’s cloud-based solutions can be implemented extremely quickly, giving insurers an advantage over other enterprise strategies and deployments that take years to install and use – if at all. Now, you can instantly deploy new pricing and personalization strategies and deliver real-time responses required for today’s digital channels. These deployment experiences deliver more than speed to market. They also allow internal teams to focus on selecting the optimum deployment timeframes and channels to meet business KPIs.
The most competitive insurance platforms will offer the most flexible architecture possible. For example, these solutions should allow easy API integrations instead of forcing pricing and IT teams to handle the data, upload it into additional systems, and then perform manual troubleshooting work to fix various issues. Any solution that lacks API capabilities will inhibit the ability to deliver personalized products to market.
The insurance rating engine software solution should also deliver the ability to work with multiple data types and modeling tools within the platform. This gives pricing and product teams maximum flexibility in working with different types of data using their own preferred tools and approaches.
Proceed with Confidence
Insurers that continue to delay the decision to adopt new technology do so at their own peril. Today, next-generation insurance solutions have already transformed the insurance industry. Early adopters have taken advantage of powerful capabilities such as data analytics, machine learning, artificial intelligence, and more, to better meet customers’ expectations and gain a valuable advantage over the competition.Share article: