Streamlining the insurance industry: addressing inefficiency head-on

Many insurers maintain technology stacks that are reliant on multiple legacy systems, which results in data being trapped within isolated silos. This fragmentation makes sharing data across various business units needlessly complex, and makes it even more difficult for insurers to drive crucial customer-centric digital transformation initiatives.

Only by seamlessly delivering the relevant data when and where it’s needed can insurers stay competitive and keep customers satisfied.

For years, the insurance industry has been perceived as slow to evolve, with established legacy enterprises continuing to operate much like they did three decades ago. Despite the advent of digitisation, many insurers still heavily rely on outdated systems and processes, leading to rising maintenance costs and diminishing efficiency.

These systems were once pioneers in technology, intricately designed to align with each insurer’s distinctive processes. But, due to the inherent complexities in insurance procedures, companies were hesitant to replace them even as they became outdated. Consequently, building additional capabilities on top of these core systems has only contributed to a growing inefficiency in their technology stacks.

The solution to this inefficiency problem is modern core platforms. These new systems, built with intelligent workflows and process automation, improve productivity by increasing business process automation, expanding the use of data pre-fill and enrichment, facilitating straight-through-processing and guided assistance for internal teams. No-code dev-ops tools provide self-sufficiency and are a significant aspect of modern technology. These tools allow insurers to configure products, add new data sources, use insurtech innovations and accelerate the use of application programming interfaces, all without hard coding. This means insurers can align business and IT operations on their own terms. Therefore, new benefits are enabled across the value chain.

What does it take for an insurer to launch new personalised products? With no-code tools, a process that once took months to code, test and launch now takes mere days. By using no-code development, commercial insurers can move to insurer-hosted pricing to enable dynamic rating. Insurers used to launch one or two products annually, but with core software changes they can launch exponentially more new products. All configuration and integration can be orchestrated so that data flow becomes one seamless series of transactions with digital tools. This frees up resources allowing greater focus on product development and personalisation of service for the customer.

The return-on-investment and efficiency of modern insurance innovations is measured in two ways. The first addresses traditional return on investments – compared with the cost of the technology, how much will productivity increase? The second way factors in the increasingly popular key performance indicator of “return on experience”.Return on experience quantifies systems that enable customer satisfaction by orchestrating and personalising, in real-time, the end-to-end customer experience via any channel of communication. Focusing on return on experience means that the technology stack must be able to deliver a comprehensive, real-time customer experience, which supports a compelling need for software upgrades. 

The argument for return on experience is straightforward – if it is simple to buy policies and manage changes or claims, prospective customers will be more likely to join and less likely to leave. These two KPIs are addressed at the same time through modern modular core platforms, whether insurers start with a fixed return on investment or a service strategy. 

Today’s strained economy and inflation-driven expense ratios push insurers to focus on cost reduction to stay competitive. The growing maturity of systems along with the enhancement of no-code tools and machine learning will help insurers solve more and more issues. With the continued adoption of future-facing tools – no-code, AI, ML and more – and a reconfigured understanding of KPIs suited to the modern technical stack, insurers will continue to bring in an era of innovation. Prices will remain competitive and customers will remain satisfied throughout the insurance value chain.

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