Insurers are not typically thought of as disruptors. You know, the ones anticipating change, willing to ride the waves, and making drastic changes based on where the market will be rather than merely reacting to regulatory changes and near-term market shifts.
Executive SummaryAs the insurance industry continues to embrace technology, Bob Meier, product solutions manager at EIS, writes about the importance of legacy system transformation. The says that it is important for carriers to move beyond old ways of thinking and constantly innovate in order to keep up with the latest trends and, most importantly, the competition.
While everyone in the insurance industry is talking about digital transformation and moving away from legacy solutions, few are doing what it takes to stay ahead of people’s expectations around shopping for insurance and their demands once they start paying for it.
Having the right technology is important in a smooth transition off of legacy systems. But more importantly, it’s about the people and partners, their knowledge, and their skills. These people – the true differentiators – understand the business challenges and have a vision for the future of insurance and its many possibilities.
Having been a part of many digital transformation projects, I can say with conviction that digital transformation projects are actually human transformations enabled by technology. Successful transformation projects require a leader who can inspire others and is willing to take a leap of faith to take action, all with the right mindset.
Digital Transformation Requires Transformative Leadership
The case for legacy transformation is well understood. Who doesn’t want to leave repetitive tasks, manual processes, and antiquated coding languages behind for automation, self-service, digital experiences and, most importantly, accelerated value delivery?
It’s imperative to replace the legacy to decrease the total cost of ownership, increase operational efficiency, quickly adapt to market changes, improve the user experience, and create a customer for life. Yes, brand loyalty is still a thing, but it’s contingent upon providing the right products and experiences that create better outcomes and promote insureds’ well-being.
How do you get there? One option is to collaborate with a technology partner—ideally one that has a digital-first, cloud-native mentality and a platform with a composable architecture. Unfortunately, many insurers have taken an overly cautious and piecemeal approach to legacy transformation, focusing primarily on the user interface (UI) rather than tapping into the underlying data to accelerate better decisions and taking the next best actions. Until insurers address this data accessibility challenge, those “cosmetic transformations” are doomed to failure.
Instead, carriers should pursue cloud-native insurance platforms with open APIs that are designed for data accessibility and that support insurance ecosystems and a digital-first mindset with quickly configurable digital capabilities.
The pandemic, great resignation, market changes, and demand for digital self-service experiences are forcing a convergence and realignment of ecosystem partners and competitors. As a result, there is much opportunity for co-creation. In this new and rapidly changing economy, legacy thinking will sink you fast.
Even the best and most visionary leaders don’t have to go it alone. Find an ecosystem partner who understands your strategy as well as the technology. The right partner can help you unlock your data and radically transform traditional administrative capabilities, such as underwriting, enrollment, billing, product setup, and claims processing. Data accessibility truly is the key to value delivery, improving the agent, broker, CSR, partner and insured’s user experience, and delivering better outcomes.
Insurance Transformation Is a Journey, Not a Destination
Business transformation is much like personal transformation. It’s a life-long commitment and process. The minute you stop evolving and transforming, you become obsolete. You get left behind and die. That’s just the harsh reality. All members of the C-suite—not just the CIO, CTO or CDO—play a role in preparing the organization, establishing the narrative, and using their influence to bring about transformational change in the insurance realm.
Often, the biggest obstacle in legacy transformation is the cultural shift necessary to adjust to new ways of thinking. This goes back to having stakeholders who can help align the organization and promote a shared vision.
The first step in embarking on any transformation is recognizing that there’s a problem and that the old ways of thinking and doing things are no longer acceptable. When you face the reality that your legacy systems are not equipped for the dynamic future of insurance, only then can you do something about it.