Transforming Legacy Systems to Adopt Emerging Tech – RapidValue
Article Synopsis :
Fast-changing industry dynamics and higher customer expectations create mounting pressure on insurers to pursue major technology as well as business process transformations.
The intent of digitization is always unification of data and the organization in general
RapidValue’s whitepaper “Digitizing Insurance – Transforming Legacy Systems to Adopt Modern and Emerging Technologies” discusses why it’s important to transform existing insurance processes and how insurers can leverage the digitisation opportunity to deliver greater value to customers. Technical obstacles often faced by insurers on their transformation journey and recommendations on planning and implementation are also proferred.
- Importance? It’s important to modernize existing systems to meet rising customer demands for convenience and experience. Digitization enables insurers to manage Big Data and enhance claims handling mechanisms with the help of new data management infrastructure and machines. Digitization becomes an imperative as traditional insurers face growing competition from non-traditional entities such as FinTechs and start-ups.
- Technical Challenges? Insurers are developing new technical infrastructures on the back of legacy systems with no consolidation of the two and no culling of aging, impeding systems. Often due to M&A or channel diversification pressure, this fragmented approach corrupts the intent of digitization – which is always unification.
- Snapshot of a digital enterprise: Insurers must orchestrate ‘ideal’ scenarios keeping in mind business perspectives, target groups, measurement metrics, governance structures and available technologies. One such view is reproduced below:
- Recommendations to modernize legacy and core systems: During the planning and implementation phase teams should always:
- Review digital strategies with the steering team.
- Consult with digital partners.
- Assess existing technologies and identify gaps.
- Identify target areas and users.
- Develop case studies.
- Develop and enhance strategic IT initiatives.
- Understand the customer and competitor pulse.
- Consolidate/replace systems.
- Render real-time business and decision making support to leadership.
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Digital Insurer's Comments
As a rule, the larger the insurer, the older the entity, the more difficult it is to digitize. So many LOBs and customers with ad-hoc systems built in support, often with no means of interoperability. And then there’s the culture – often as siloed as the technology deployed in its service.The key for large insurers is to think small, like InsurTechs, focusing on business value creation in specific areas. For example mobile-enabled First-Notice-of-Loss in claims or sensor-based technologies for property risk management.
At the same time insurers must begin with the end in mind. All initiatives must roll up to an architectural overview committee ensuring individual decisions lead ultimately to a more unified organization. Centralized coordination of LOB decisions is the formula for success.
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About the Author
Hugh Terry
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Hugh Terry
CEO
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