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Several insurance companies have technology structures that use several old systems, causing data to be stuck in separate groups. This division makes it complicated to share data between different departments, and makes it challenging for insurers to implement important digital transformation projects that focus on the customer.
Insurers must effectively provide necessary data at the right time and place in order to maintain their competitiveness and ensure customer contentment.
The insurance sector has long been seen as resistant to change, as traditional companies continue to function in much the same way as they did 30 years ago. Despite the introduction of digital technology, numerous insurers still heavily depend on outdated methods and procedures, resulting in increasing maintenance expenses and decreased effectiveness.
These systems were once at the forefront of technology, carefully crafted to fit the unique processes of each insurance company. However, due to the complicated nature of insurance procedures, companies were reluctant to update them as they became obsolete. As a result, adding new features to these core systems has only added to the inefficiency of their technology infrastructure.
The way to solve this problem of inefficiency is by using modern core platforms. These updated systems are designed with smart workflows and automated processes, which increase productivity by automating business processes, utilizing pre-filled and enriched data, enabling straight-through processing, and providing guided assistance for internal teams. No-code dev-ops tools promote independence and are a crucial aspect of modern technology. These tools allow insurance companies to customize products, incorporate new data sources, utilize insurtech advancements, and expedite the use of application programming interfaces (APIs), all without writing complex code. This empowers insurers to align their business and IT operations on their own terms, resulting in new advantages throughout the value chain.
What is necessary for an insurance company to introduce new customized products? By utilizing no-code tools, a procedure that previously required months of coding, testing, and launching can now be completed in just a few days. With the help of no-code development, commercial insurers can transition to using insurer-hosted pricing, which allows for dynamic rating. In the past, insurance companies were only able to launch one or two products per year, but with changes to their core software, they are now able to release a significantly higher number of new products. All configuration and integration can be coordinated to create a seamless flow of data through digital tools. This allows for more resources to be allocated towards product development and providing personalized service to customers.
The success and effectiveness of new insurance advancements are evaluated using two methods. The first evaluates the traditional return on investments, which compares the technology’s cost to how much it will increase productivity. The second method takes into account the growingly popular key performance indicator known as “return on experience.” This measures the ability of systems to enhance customer satisfaction by customizing and coordinating the entire customer experience in real-time, across all communication channels. Prioritizing return on experience requires a technology stack that can provide a complete and timely customer experience, highlighting the importance of software upgrades.
The reasoning for the importance of having prior experience is clear – when purchasing policies and handling alterations or insurance claims is easy, potential customers are more inclined to sign up and less likely to cancel. This can be achieved simultaneously by utilizing modern modular core platforms, regardless of whether insurers focus on a fixed return on investment or a service-oriented approach.
The current economic challenges and rising costs due to inflation have prompted insurance companies to prioritize cost-cutting in order to remain competitive. As technology advances and non-coding tools and machine learning improve, insurers will be able to address a wider range of issues. By embracing cutting-edge tools such as no-code platforms, artificial intelligence, and machine learning, and reevaluating key performance indicators in light of modern technology, insurers will continue to drive innovation in the industry. This will lead to competitive pricing and satisfied customers throughout the entire insurance process.
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In 2021, Graham Gordon became the Product & Strategy Director for Property and Casualty at Sapiens. He previously worked at LexisNexis Risk, overseeing the development of various products related to vehicle data and connected cars. Before that, he held a leadership role as the Director of Marketing. Graham has a bachelor’s degree from Lancaster University, post-graduate qualifications from the Chartered Institute of Marketing, and recently completed a master’s degree from the University of Cambridge. He graduated from the Executive MBA Program at the Judge Business School.