The global insurance industry is under pressure to change, and quickly. The claims side faces increasingly frequent and severe weather events, and customers demand the ability to interact from anywhere using different devices. In the health sector, an aging population and ballooning costs of latter-stage life treatment are putting pressure on systems and bottom lines alike.
The right platform
To keep up with industry and business needs, insurance company CIOs must adopt a digital platform, or core, in the mid-office over the back office. The digitization of processes is driving a need for robust digital platforms, and to date few CIOs have focused on overhauling the mid-office. As a result, legacy technologies consume the budget, leaving few remaining resources for digital transformation.
The digital insurer requires a mid-office that can meet the needs of digital commerce and IoT without adding technology that only increases the debt to legacy systems. In short, the run platform must also serve as a platform of innovation.
Insurers must also be able to easily innovate at the front end and take advantage of standard APIs that cater to ever-changing customer requirements. The benefits of open APIs have been widely reported. Some of today’s insurers will move from being a policy provider to a one-stop shop that integrates such topics as driver telematics, managed health, and lifestyle targets.
This could expand into the buying network to reduce supply cost and provide customers with deals on, for example, gym memberships and other services. This shift to integration of services and data in real time outside the organisation will require open modular platforms.
Insurance innovation needs to be fast and dynamic. That means faster time to value and delivering excellence, convenience, and innovation at the point of service wherever it is. This goal can be achieved only by leveraging a standardised, preconfigured approach that offers real-time process automation, innovation, and insight. The combination of these attributes will enable smaller insurers to compete as effectively as their larger counterparts in today’s digital revolution.
A preconfigured solution will also significantly improve the business process. Consolidating data that’s scattered across many different disconnected sources gives access to real-time insights, enabling CIOs to make better and more meaningful operational and financial decisions. For instance, the ability to review a customer’s diet or activity would enable an insurer to offer proactive advice that could prevent the need for expensive treatment in the future.
Can your current systems shift your business processes to a frictionless, lower-cost run that will free up budget to renovate and innovate systems of engagement? For most insurers, the answer is no. For that reason, it is time for all insurers to analyze their systems through the lens of the digital economy.
In my next blog, I will discuss the vision for insurers in 2020: What does it mean for the industry, and how can insurers prepare now for the digital journey?
For more on this topic, read the latest Gartner report, which offers key findings and recommendations for insurance executives looking to drive digital transformation.