Today’s preneed insurers are being hampered by the limitations of older technology. They’re confronted with a “no-win” dilemma. They can either:
- Limp along with their heavily customized but antiquated policy administration system, adding modest, incremental improvements that won’t do much to move the needle; or…
- Move forward with a new policy administration system, knowing that the customizations that were made in the legacy platform will have to be added to the new system to avoid a giant step backwards in functional capabilities and customer service.
While preneed insurers must grow their top line and reduce operating costs to compete in a niche industry, the second option can seem too time-consuming and risky. The inability to solve the above dilemma often means the de facto selection of the first option, which keeps the lights on, but doesn’t truly transform the operation. The ability to partner with a technology provider offering both a modern, policy administration system optimized for the preneed market, as well as expertise in preneed and proven implementation skills, would go a long way to resolving this dilemma for preneed insurers.
Insurers can’t afford a failed implementation and many of them, including most preneed insurers, are not in a position to completely re-staff their IT operation to accommodate a new technology team, so a hosted solution may be appealing. And for insurers who have spent years cultivating important relationships with key producers and channel partners, disruption, or even perceived disruption, can adversely impact these critical relationships. This may result in loss of shelf-space and market share.
Further complicating matters is the fact that preneed insurers often have different needs than other insurers, and even within the preneed space, funeral directors will likely have different requirements than third party marketers and the home office staff. It is critical that the needs of multiple partners and producers be met.
Finally, scalability is key for preneed, because the market is based on high volumes of low margin policies and a broad range of different product types. To keep their portfolio fresh, the flexibility to design new features and products is also of critical importance, depending on changes in the death care industry.
For more information regarding preneed challenges, as well as how to solve them, please check out my white paper, Solving the Preneed Dilemma.