How Modern Insurance Policy Systems Are Reinforcing the Insurance Industry – It’s time for insurers to shake off the shackles of legacy systems that hamper operational efficiency and hold back market pressures.
But to do so, they first had to recognize the more sophisticated features and added value that a successful PAS transformation could bring to their business. In fact, not everyone wants to realize the value of a flexible policy management system (PAS) with different modules.
There is no doubt that modern PAS will transform the insurance industry and enable insurance companies to regain lost ground by influencing people, processes and technology. It provides an unparalleled level of availability, reliability and security. First and foremost, insurance companies that stick to legacy systems must face some harsh realities.
Gap between rich and poor
Insurers rely heavily on legacy systems to support their core applications. Supports day-to-day operations such as policy issuance and servicing, claims processing, and underwriting and collection processes. This makes insurance companies reluctant to change their legacy systems.
However, this highly regulated and document-intensive industry is severely hampered by restrictions imposed by legacy systems. Insurers committed to legacy inefficient but functional systems were manually handling paper stacks and re-entering data between systems, creating massive bottlenecks and performance delays.
It also creates inaccuracies that can cause more bottlenecks. On the other hand, by adopting a modern PAS, insurers can easily modify existing products and introduce new products while gaining greater agility in their processes and reducing time-to-market.
As more insurance companies turn to them, half the industry changes their processes and how they work, leaving the other half miserable about customer service, efficiency and competitiveness.
Rules of Digital Transformation
Legacy systems operate on languages and system architectures developed in the 70s and 80s. In an era where every industry is moving data to the cloud and using big data applications to gain strategic and actionable business insights, their age is completely unsuitable to support digital transformation. Insurers who understand this are adopting modern PAS and are quickly starting to make the changes they need to embrace the digital age.
There is no doubt that insurers without modern PAS will lag behind in terms of service implementation, technology relevance and speed to market when compared to insurers that adopt it. Some of them may have adopted other systems that help extend legacy systems, requiring a highly knowledgeable team to do the necessary core system customizations and modernizations. Resisting modernization to reduce the risk of implementation and data migration failure by insurers can lead to regrettable incapacity and loss of market share.
Not actually risk mitigation
Avoiding risk and avoiding disruption is commonplace in the insurance industry, but insurers cannot be comprehensive enough to avoid implementing new technologies out of fear of risk. As the world around you moves operations to the cloud, there should be few distractions to achieve your vision of the necessary technologies and benefits that digital transformation can bring.
The importance of replacing outdated technologies and outdated development methodologies must be realized by the enterprise. Additionally, other structural constraints must be recognized and corrected in the process. Fear of implementation failure cannot rule out guaranteed opportunities to change legacy systems to gain competitive advantage.
While all these concerns are holding back some insurers, others are still driven by business needs to focus on the market and modernize their core systems. Their business thrives while others fail. Because such upgrades increase their responsiveness. They bridge the gap in product and distribution strategy and deliver superior customer service to retain existing customers and reach new markets. Improved service strengthens the insurance industry itself, making it stronger and more attractive to customers.