The key questions to ask before upgrading your insurance technology
August 2, 2018
More and more insurance companies are taking the leap to replace their old legacy IT systems with modern, sophisticated core technology in a bid to reinvigorate their business.
Digital systems offer new opportunities to create products that connect strongly with customers, and make the process of bringing products to market faster and smoother. At the same time, these modern systems are helping to drive efficiencies by moving the business away from paper-based administration to digital processes. A core transformation also addresses some of the biggest concerns for the CEOs of insurance companies: regulation and compliance. Digital systems allow for automated management of complex new regulations like GDPR.
Moving to a digital platform is arguably the best way to prepare insurers for the demands of the modern world. However, it can be a long, and at times, risky process.
Before you upgrade your insurance technology, there’s a number of things you’ll need to consider. Here, we outline five of the key questions you need to ask before making a decision.
Will it work with all areas of the business?
An insurance technology system must be able to support different product lines for the business and all the processes involved in running day-to-day operations. Insurance companies will need to ensure the product capabilities offered by a new core system will support this.
An important consideration is whether the system offers pre-configured support for integration with third-party providers. Whether policy administration or claims management, the modules must be consistent with one system rather than being differently coded products that the vendor is offering.
How easy will it be to use?
Ease of use should be a vital consideration. Your legacy system may be past its sell-by date, but at least your staff are familiar with it. And up until now, they’ve probably been fairly happy with it.
It’s not just about having a user-friendly solution for IT either. Non-specialists in the business need to be able to use it with ease. No one should have to do any coding to work with it. It should be straightforward enough for a business analyst to configure products, and for other members of staff to build the workflow and business processes required.
How does the pricing model work?
A core systems operator will probably charge a monthly or annual licence fee for using the system. This fee is likely to comprise the cost of support, training for staff and implementing updates.
But what’s really important to consider is how the fees may be impacted when new versions or updates are launched. Will the fee increase each time or remain stable? It’s not just the upfront costs you need to think about, but any future costs too. Then there’s the cost of conversion and infrastructure that must be included in the business case for the new solution. Once you have all the information you need - and it’s vital to do your due diligence - the costs should be set against the potential cost of not taking action.
How long will it take to implement?
As with any new system, but particularly one that underpins the entire operations of a company, implementation won’t just be a case of simply swapping out the old for the new. Existing data will need to be migrated on to the new platform. Will this happen automatically? The implementation phase could last anything from a few weeks to a few months to get the basic system installed and up and running. Then there’s the question of when the benefits will start to accrue. How long before the system starts to pay its way?
The problem with it dragging on too long is that the rapid pace of technological change may leave your system outdated before you’ve reaped any benefits. This is why finding a future-proofed system that offers updates or a modular approach is vital. The flexibility means you’ll be able to adapt it to your ongoing needs.
How easy will it be to integrate into the company culture?
Many of your staff will have been with you for a long time and will be used to working with the current system. Though change is becoming a constant for organisations today, there may still be a reluctance amongst your people to switch to something new and unfamiliar.
Buy in from staff will be crucial for ensuring a smooth transition period, and this can only happen by communicating how it will improve both their lives and the functioning of the business. Choosing a system that offers a strong user experience and helps staff achieve their goals is also key. And this means investigating a system fully before implementing it. Look for a modern user design that doesn’t compromise on quality. Running a trial or visiting a company who already have the system to see how staff use it can be helpful.
Sophisticated digital platforms are revitalising the insurance industry, but implementing one in your business and getting it right is no easy feat. Before you go ahead with upgrading your insurance technology it’s important to consider how a new digital platform will meet the specific needs of your business, as well as the challenges you’ll need to overcome to ensure a smooth transition.
Written by Angelika Kabaivanova
Angelika has over 19 years of experience in the B2B marketing and is truly passionate about marketing in a global environment. With her, she brings a profound interest in disruptive technologies and the world of tomorrow, along with an insightful knowledge of future market trends and digitalization.