What is insurance platform modernization?
Insurance platform modernization refers to the transformation and upgrading of legacy systems and business processes used by insurance companies to better serve customers, adapt to market changes and harness new technological advancements.
As the insurance industry grapples with evolving consumer expectations, regulatory demands and rapid technological developments, modernization becomes crucial for insurers to remain competitive and efficient.
Insurance platform modernization can require strategy shifts, retraining of staff, system migrations and possibly some disruption. However, its benefits outweigh the challenges, ensuring that insurance companies remain competitive in a rapidly changing landscape.
What are the business benefits of insurance platform modernization?
- Adoption of new technologies. Legacy systems are often rigid and difficult to upgrade or integrate with new technologies. Modern platforms use cloud-based systems, artificial intelligence, big data analytics and blockchain to improve processes and deliver better customer experiences.
- Improved customer experience. Modern platforms provide a seamless customer experience with user-friendly interfaces, faster processing and multi-channel engagement.
- Operational efficiency. Legacy systems can be cost-intensive to maintain. Modern systems can streamline operations, reduce redundancy and automate manual tasks.
- Enhanced data analytics. Modern systems allow for more advanced data analytics capabilities, which can be used to understand customer behavior, predict market trends and create more tailored insurance products.
- Regulatory compliance. As regulatory requirements evolve, insurance companies need adaptable systems to stay compliant without incurring significant costs.
- Integration capabilities. Modern platforms have better integration capabilities, enabling them to easily connect with third-party systems, tools and applications.
- Scalability. As insurance companies grow and evolve, they need systems that can scale with their, and the market’s, changing needs.
- Cost savings. Over the long term, maintaining and patching older legacy systems can be more costly than transitioning to modern platforms.
- Innovation. Modern platforms can more easily integrate with innovative tools and technologies, allowing insurance companies to stay at the forefront of industry advancements.
What is the best approach for insurance platform modernization initiatives?
The most successful initiatives are led by business strategy and objectives. This ensures the delivery of future-ready solutions that drive superior outcomes—boosting agility, innovation and efficiencies.
Businesses that take a technology-led approach to insurance platform modernization often regret it. A tech-led approach typically comes with significant drawbacks and doesn’t:
- Provide a business capability fit
- Leverage the cloud as a modernization opportunity
- Drive well-managed cloud financial operations
- Address workforce transformation needs
What should I look for in an insurance platform modernization partner?
The most accomplished partners will typically offer the following advantages:
- Business and technology accelerators to keep you focused on the processes that make your company run
- Technology assessments using IP and accelerators that speed the process, whether you’re moving to the cloud or remaining on premises
- Multi-year roadmap that rationalizes value-added applications and outlines a remediation path for technology, infrastructure and software
- Core/tech modernization, driving acceleration and predictable delivery via DevOps
- Modernization and data-driven insights to help target the right customers through the right channels with personalized offerings