How Modern Insurance Policy Systems Are Reinforcing the Insurance Industry
It’s time insurers threw off the shackles of their legacy systems, which add to the oppression of market pressures by hampering the effectiveness of their operations. But to do so, they need to recognize the improved functionality and additional value a successful PAS transformation could bring to their businesses first. Truth is, not all are willing to realize the value from a ï¬exible policy administration system (PAS) with its different modules.
There’s no doubt that the modern PAS is transforming the insurance industry and making it possible for insurers to regain lost ground through impacting its people, process and technology; while offering unmatched levels of availability, reliability and security. Among other things, insurers staying loyal to their legacy system must face some hard truths:
1. Gap between the Haves and Have-Nots: Insurers depend heavily on their legacy systems to support their core applications. They support day-to-day tasks like the issuing and servicing of policies, processing of claims, as well as underwriting and billing processes. This makes insurers reluctant to tamper with their legacy systems. But this highly regulated and document intensive industry is being seriously hampered by the limitations laid down by their legacy systems. Insurers who remain committed to their inefficient but functioning legacy systems are manually processing piles of papers, and re-keying data between systems creating tremendous bottlenecks and time lags in their performance. They also generate inaccuracies which are bound to cause further bottlenecks at a later date. On the other hand, by adopting a modern PAS, insurers gain tremendous agility in processes and can easily modify old products and rollout new ones, with reduced time-to-market. As more insurers turn to them, half the industry is transforming its processes, its way of functioning and leaving the other half woefully behind, on customer service, efficiency and competitiveness.
2. Rules digital transformation out: Legacy systems operate on languages and system architectures which were developed in the ’70s and ’80s. Their age makes them completely unsuited to support digital transformation, in these times when every industry is porting its data to the cloud and employing big data applications to derive strategic and actionable business insights. Insurers who understand this are adopting a modern PAS to quickly initiate the changes needed to embrace the digital age.
3. Incompetence: There’s no doubt that insurers without a modern PAS lose out on service enablement, technological relevance and product speed-to-market when compared to the insurers who adopted one. Some of them may have already adopted other systems which helped them to extend the legacy system, requiring a highly knowledgeable team to undertake the required customization and core system modernization. If the insurer rejects the modernization wishing to mitigate the risk of a failed implementation and data migration, it may result inevitably in incompetence and a regrettable loss of market share.
4. Not Really Risk Mitigation: Being risk averse and avoiding disruption comes naturally to the insurance industry, but cannot be so comprehensive that the insurer avoids the adoption of a new technology fearing the risks. As the world around them is porting its operations to the cloud, they must accept a modicum of disruption in anticipation of achieving their vision for the technology they need and the resulting benefits from the digital transformation.
5. Implementation concerns: The importance of replacing outdated technologies and antiquated development methodologies needs to be recognized by businesses. They must also recognize and modify any other structural constraints in the processes. Fear of implementation failure cannot come in the way of an assured opportunity to gain competitive advantage by transforming one’s legacy system.
While all these concerns are holding some insurers back, others stay market-focused and are driven by business needs to undertake core system modernization. Their businesses flourish, while others flounder, as such upgrades improve their responsiveness. They close the gaps in their product and distribution strategy and provide superior customer service to retain existing customers and reach new markets. Their improved services are reinforcing the insurance industry itself, making it stronger and more attractive to its customers.
Prime enhances global insurers by transforming operational efficiencies, specifically in insurance software. Prime insurance solutions offers comprehensive leading-edge proprietary analytics. Our expertise has proven effective by streamlining legacy business processes such as enrollments, underwriting, claims, and customer services