In today’s competitive market, insurance firms depend on technology to deliver value to their customers and to their stakeholders. The more advanced the technology, the more value insurers can add to their business — a factor which significantly drives technology adoption and innovation in the sector.
Insurers that remain complacent about their legacy systems will find that their business development is hampered, and objectives are harder to achieve — leading to them falling behind their rivals. A recent report by Fintech Futures has found that 92% of insurers in the United Kingdom still rely on legacy tech and infrastructure, including outdated software for administering their policies.
We have already discussed the precise risks for businesses that neglect to upgrade their policy admin systems in our previous blog. But rather than focus on the negatives, we need to turn to the positive factors which can motivate system innovation. For CEOs, CIOs, and Heads of Data within insurers, the benefits of upgrading a policy admin system are ultimately too advantageous to ignore.
This article will outline some of the benefits of a newer system and briefly discuss how insurers can facilitate an upgrade.
There are five key benefits to modernising a policy admin system:
Implementing a modern policy admin system can streamline operations within the business and increase efficiency. Policies can be filed and organised better in modern systems, which are much easier to navigate.
The rules-powered policy administration systems enable insurers to carry out rapid product development, streamline policy management, and make quick and simple policy changes as and when needed. Modern technology allows insurers to better respond to the demands of their customers and react to new trends in the insurance market. Thus, new policies can be launched far faster than before.
As a result of this acceleration, it’s now possible for companies to test and bring out new products weekly; something which would have seemed inconceivable before.
Secondly, upgrading policy admin systems makes communication between all relevant stakeholders within and without the organisation easier. For example, insurers can:
Meanwhile, by integrating the admin system with existing comms systems, insurers can help insurers break down data silos. Doing this can provide them with access to better-quality datasets and actionable insights, which can be used to facilitate more accurate business forecasts and decision-making down the line.
We all know that inflation and other economic factors are currently putting major pressure on business owners to lower their Total Cost of Ownership (TCO). Insurance firms are no different, and CFOs are now motivated to find ways of driving ROI improvements when looking at what technology is best to invest in.
Implementing a modern policy admin system is one such way for business leaders to save money. When insurers depend upon ageing systems, they also rely on diminishing knowledge from a finite supply of workers who know how they work.
Widespread ignorance of the intricacies of the obsolete system will only compound over time, as those with the expertise are filtered out of the organisation. Not only that, but a legacy system is likely to require more maintenance and manual fixes, which ultimately increases TCO.
A new policy admin system can also assist insurers in identifying relevant insurance trends and provide them with more complete datasets. Doing so can grant them a more complete view of their customers, whether that’s an overarching look at the various customer segments their business depends on or a focus on individual customers and their unique insurance needs.
As a result of this, insurers can respond to these needs by crafting more personalised products and offerings to customers, something which we know insurance customers are responsive to. Indeed, a study by Accenture has found that 95% of new customers are willing to share their data in exchange for personalised insurance services.
Finally, relying on dated admin systems makes it harder for insurance firms to keep up with changes in regulation and remain compliant. Failure to stay compliant can lead to hefty penalties for the insurer in question, which can affect its revenue and reputation.
The recently amended Consumer Duty Legislation from the Financial Conduct Authority is one such example of a recent change in regulation which had insurers scrambling to keep up with its regulatory modifications to policy.
However, using a newer policy admin system makes it easier for insurers to stay ahead of changes in legislation as and when they occur, either through regular, supplier-led updates to the core system, or through configuration changes which can be managed entirely by the insurer.
For those insurers looking to update their policy admin system, INSTANDA is the best option for anyone who wants full control over the configuration and integration of their instance. The no-code nature of the platform means insurers do not need a technical background to build, integrate and amend the system they need.
Meanwhile, the INSTANDA platform is continually being updated and integrated. This means that insurers who want to level up their admin system can be sure they’re always staying ahead of the competition with the most innovative and relevant tech available.
But, ultimately, the true power of no-code is its ability for companies to upgrade at scale and at their own pace. Rather than rip out and replace their entire legacy system, insurers can jump straight into using no-code tools and cherry-pick what aspects of their existing tech they want to replace. This makes for a smoother transition without a steep learning curve and opens new product possibilities for insurers looking to branch out into new areas.