The global outbreak of coronavirus has exposed an unpleasant truth: many insurers are stuck with legacy systems that prevent them from offering seamless digital experiences to their customers and/or employees. Even more damaging, they can’t lower operating costs at a time when claims are climbing and margins are disappearing.

This isn’t a momentary problem. As bleak as things seem at the moment, one day this crisis will be over…and property & casualty (P&C) providers will still seek to modernize to remain competitive. Reconciling this seemingly contradictory mission – how can an insurer reduce operating costs while providing a better experience? – can only be achieved in one of three ways:

  1. Replace the current PAS with a fully integrated suite
  2. Adopt a best-of-breed approach by replacing a crucial module(s)
  3. Put a digital layer on top of your PAS

Select a Pre-Integrated Suite

The full suite approach has many advantages: there is a single technology stack providing a full suite of core systems with integrated and modern architecture that can be implemented modularly (if needed). Processes are automated, which reduces costs, while pre-integration facilitates a superior experience. P&C providers can benefit from working with a sole vendor that offers full accountability. The drawbacks: some insurers are turned off by the price, while others find it difficult to trust a single partner to service multiple stakeholders across the organization.

Adopt a Best-of-Breed Approach

Choosing a vendor that offers a solid core module, such as policy, billing or claims, can help with technology innovation and automation. The rich functionality can accelerate the customer experience in that specific area, as well as time to market for new products. This approach also staggers technology risk. The downside: it can be a challenge (and sometimes costly) to integrate and maintain independent, complex technology stacks.

Put a Digital Layer on Top

A modern digital engagement platform can sit on top of legacy systems that aren’t flexible and have difficulty managing data. This approach provides digitalization and APIs to harness insurtech, so carriers can quickly take advantage of artificial intelligence, machine learning and more, to reduce costs and improve the experience. However, insurers who go this route won’t reap all of the benefits of a fully integrated suite and some legacy systems might be too antiquated for this approach.

The Right Choice?

Perhaps you are expecting a hard-sell of the first option…but each insurer is unique and there isn’t one correct choice. A vendor should act as a trusted advisor to P&C carriers after understanding what they are trying to accomplish from a business and technical perspective. There is one correct choice, however, when it comes to WHEN to modernize: start now, so you’ll be strong in the marketplace and ready for the next global disruption.

  • API
  • best of breed
  • corona
  • coronavirus
  • COVID-19
  • customer engagement
  • digital layer
  • digitalization
  • insurance
  • insurers
  • PAS
  • policy administration system
  • Pre-integrated
  • pre-integratyed
Colleen Wells

Colleen Wells Colleen Wells is responsible for Product Strategy for Sapiens North America P&C, as well as Sapiens’ Digital Product Suite globally. She possesses expertise in professional services, customer success, running product teams and her true passion — understanding market trends and providing valuable solutions to carriers and customers.