Every day, agile new businesses crop up that threaten the survival of the stalwarts that dominated before. With technology developing at a rapid pace, no business is immune to the threats posed by the Upstarts and the ‘Lemonade-like’ insurtechs of the world. Yes, digital transformation is real and it’s not just the domain of the new startups on the scene. Companies in long-established industries – like insurance – must adopt technologies that will allow them to not only keep up with, but also outperform their fast and nimble younger siblings.
The Future is Now
Consumer expectations have also changed dramatically in recent years. Today’s consumers demand personalized services that meet their immediate needs from every touchpoint – their insurance provider being no exception. It’s hard to meet these expectations when you are still relying solely on inefficient, clunky legacy systems.
Today, we can look at existing companies in the insurance industry to prove that no matter how reputable or how large their customer base is, they cannot rely on a backend full of outdated technology and inferior solutions to beat their competition. It simply is not enough to be able to compete in the changing market when you have disjointed and weak workflows, cobbled systems that are error-prone, and limited machine learning capabilities with ineffective automation capabilities.
Ensuring that your technological infrastructure is ready to deliver maximum impact in the digital revolution is a must. Read on to discover why.
The IT Legacy Burden
Insurance companies have operated for years using a variety of systems to price policies. Many are implicitly following the “if it ain’t broke don’t fix it” rule and are hesitant to replace legacy systems with more modern, advanced technological solutions.
This hesitancy, however, can lead to significant risks:
- Operational – as legacy systems become outdated, fewer IT professionals will be able to maintain and support them, increasing operational costs. Additionally, the constantly increasing volumes of data and the necessity to incorporate AI and ML tools for real-time execution, are non-negotiable. Less is more, whereby fewer but more efficient tools now deliver a higher impact than older infrastructures with multiple disjointed systems.
- Product Development – the high cost and time constraints of creating new products using older, less agile systems significantly reduces the ability of insurance companies to introduce new products and respond to the rapidly changing needs of the market. Without the most sophisticated AI and machine learning technologies, products fall behind and fail to meet customer needs.
- Business – as business goals change, it is important for the infrastructure to be able to operate in line with the new and updating business goals. Goals that include satisfying customer demands much faster, including real-time.
- Technology – mission-critical business processes such as pricing and rating should not be held back by the lack of capabilities inherent with legacy systems. Now more than ever, companies need to ensure that their technological infrastructures have the advantage over the competition. Meeting modern standards is not enough to stay ahead. The technology that is ready for tomorrow is the technology that will help businesses win today.
- Data – miscalculating and inaccurately determining a customer’s risk profile are some of the mistakes that can happen when data is processed inaccurately. Errors like these occur because of poor data handling, where data is corrupted through the manual transfer from one disparate system to another. The time and effort needed to rectify such errors end up costing businesses more than just precious time.
The bottom line is that merely maintaining legacy systems can account for up to 70% of a company’s IT budget, a number that will only increase as these systems continue to age. Not to mention how profits are being negatively impacted by money being wasted on systems that are out of date and therefore vulnerable to failures and risks.
Easy IT Integration & Scalability
An open platform like Earnix ensures connectivity to all platforms, from the legacy infrastructure of yesterday to the world-class offerings of tomorrow. One of the added benefits of iteratively deploying these innovative technologies is that value can be produced along the way. Enhancing productivity and other capabilities throughout the digitization journey is a true measure of scalability and is essential to consistent business success.
According to McKinsey, companies that invest in new technology are more productive than those that rely on legacy systems. Modernized companies achieve more than a 40% higher total number of policies per full-time equivalent employee.
This increase in productivity is due to the fact that advanced systems that use machine learning and artificial intelligence (AI) are extremely agile. They are constantly learning new details about customers and what products would most suit them, and they allow for these new products to be created and offered to the market at record speed.
Why would you take months to offer a new product (when it will probably be outdated by the time it even gets to market) using a legacy system when you could have new and better products introduced to the market within minutes?
Optimize Efficiency of IT Team
How much time does your IT team spend on issues related to legacy systems? It’s probably a lot, and a lot more than necessary. Some engineers spend up to a third of their time on legacy system upkeep. By upgrading your systems to smart technology, many processes will be automated and will run much more smoothly, requiring less attention from the IT team.
Staff time can be much better put to use by helping to scale up new systems and ensure that they are running as efficiently as possible.
Let Earnix Help You
If you’ve gotten this far and have realized that it might be time to start preparing your company for the insurance revolution, we have good news. AI-powered solutions like those provided by Earnix are built to make it smarter, faster, and safer for insurance companies to provide their customers with competitive prices and personalized products. What’s more, Earnix is designed for fast implementation and can be integrated within any existing and future infrastructure.
Get in touch to learn more.