Digital is a dominant trend in insurance across all verticals and insurers are working hard to meet the demands of a digital operating model and the customers who use it. Recently, Sapiens, together with The Insurance Network, conducted a roundtable of digital leaders in the insurance industry. We wanted to know what are the biggest drivers for digitilisation and some of the key challenges.
- 35% believe that responding to customer expectations is the biggest driver for transformation
- 49% said that their biggest challenge is reducing IT complexity
- 34% think data quality is their largest operational challenge
Insurance companies, as seen in our survey, understand that the future is digital. But undoing decades of organizational technology and recognizing the needs of a new generation can seem like a mission impossible.
Many insurers want to go fully digital, as outlined above, but are daunted and apprehensive that a switch from their legacy systems to a digital core system will be too time-consuming, error prone and costly. Greenfields or startups need to quickly offer digital services in order to be competitive in the marketplace. Established companies are looking for ways to quickly launch new products in response to a changing market.
Insurers need an out-of-the box, cloud-native solution that answers the critical need for change without a large investment of time and money. They need a solution that can provide a scalable but expandable platform as they grow their organisation and their lines of business.
And of course, it must be a low/no code solution with built in APIs. Low/no code allows for creating rules and customer journeys without extensive involvement from IT. It also means that upgrades are secure and streamlined and done in a day, not weeks. APIs allow for access to InsurTechs and ecosystems that can be used for customer engagement, personalisation and taking advantage of data and analytics.
As a bonus, putting a ready to launch digital solution in place is much faster than replacing all legacy systems. Whether you are an existing player, a greenfield insurer or a start-up, adding the power of template libraries, the ability to build on a basic portal and leveraging configuration wizards allows you to meet both short- and long-term goals.
These end-to-end PAS are like the self-driving cars. Get in, set your destination (or your customer’s journey) and you’re on your way.
Insurers’ natural reaction to a global crisis is to begin cost-cutting and saving. But Laura J. Hay, Global Head of Insurance at KPMG International, says the counter-intuitive move may be the way to go:
“While it is tempting for insurers to suspend investment and cut costs in such a challenging financial year, I believe the crisis creates an incentive for them to do the reverse – continue to invest in how they operate and create a more agile, digitally-enabled business. In other words, now more than ever insurers should keep investing forefront in their minds so that they can be prepared for the future.”
Insurers cannot wait to make their digital investment but replacing all legacy systems may seem costly and formidable now. A plug and play, MVP digital solution may be the best way to meet customer demands today.