In 2020, insurance changed forever. The coronavirus pandemic blurred the lines between business and personal insurance needs as the population was forced behind closed doors to work, learn and communicate. And though the world slowly attempts to return to normal, over 40 percent of the population is still working from home. Thanks to changes like this, and the need to redefine
“normal” in all aspects of life, how insurers define coverage and underwrite it will take on a different dimension.
COVID-19 hit without prediction, preparation or warning, and insurers had to show adaptability, which was never required of them before as they adjusted their products to the new lifestyles of their end customers. But what the pandemic laid bare was that this kind of agility and speed to bring new or modified products to market needs to be a permanent feature in the industry. The dexterity with which insurers operate going forward will define their success, and the technology they use is a core part of this.
Say Goodbye to Systems of the Past
As companies attempt to put the disruption of the pandemic behind them and look to the future, it may be time to do away with systems of the past. Unfortunately, the P/C sector has been subjected to large, indivisible IT system monoliths for many years. Shifting away from them may not have been a priority, until now.
These monoliths—groups of heavy technologies that primarily served the back office via the best available systems of their era 20 years ago—have ballooned over time into vast codebases. Because they evolved as companies tacked on new functionalities on an ad hoc basis, monoliths exist by accident, not by design. As time goes on, when combatting unprecedented events, companies cannot rely on chance.
The pandemic, among other evolving risks like cyber crime and unpredictable weather, means that the coverage customers need is changing all the time. More iterative coverages like parametric and usage-based insurance are growing in demand, and these instances require a flexible algorithm as needs fluctuate. This provokes constant change in the world of insurance, as carriers and MGAs prepare for wider varieties of coverage and new ways of enhancing the underwriting process.
Therefore, today’s coverage needs to be more intuitive and efficient than the slow processes of the past. New developments need to be tested to ensure profitability, accuracy and a smooth experience for the end client. If the fast-moving market has taught us anything, it is that companies cannot afford to spend months, or years, on the requirements of an additional functionality—let alone one that falls short of what it promised.
Iterative testing and innovation are harder in larger companies. Insurance carriers resemble heavy, slow-moving vehicles: taking a sharp turn, building speed or changing is inevitably not going to be as smooth a process as that of a smaller, more agile body. But small and large businesses alike need to be increasingly responsive and nimble in a very different P/C landscape to last year.
SaaS Key to Post-Pandemic Progress
SaaS-based solutions provide the best means for insurers to redefine their approach post-pandemic. Fully digital insurance platforms mean that no one needs to implement servers in person or waste time on paper. These cloud-native systems also work iteratively, an essential characteristic that can go hand in hand with progressive approaches. Insurers now understand that things can change in days and weeks, rather than months and years. More than ever, the ability to quickly change coverages and processes matters. Speed to market during a pandemic even a decade ago would not have been possible, but no-code solutions enabled companies to remotely bring products to market in incredible timeframes.
Successful systems today require a perfect balance of best practices with intelligent configuration to keep pace with the competitive market. SaaS-based solutions can do all the work for you, regularly upgrading without any action by the vendor and constantly working behind the scenes to ensure a smooth ride for the vendor and the end client.
The last year has redefined what insurance means to individuals and businesses, and insurance carriers need to be prepared to move with the tide of change as it continues to roll. Therefore, a company that puts up with the slow processes and timelines of the past is not a sustainable or profitable one. Businesses need to realign their strategy to move away from monoliths, encompassing old and new risks into modular, agile technology.