Anything new brings with it a degree of confusion, misinterpretation and misunderstanding and insurtech (insurance technology) is no different. We unpack some of the major misconceptions around this game-changing software, in a must-read for insurers.
Myth 1 “It’s too difficult to move our data and employees onto a modern platform”
Most insurers know that legacy technology is more costly to operate and maintain than modern cloud solutions. Yet they feel it would be impossible to migrate the data stored in their systems to a new platform, let alone re-train employees familiar with these systems to work with new technology.
Our Click2Sure platform has flexibility around how the platform is set up, which allows us to mimic legacy system configurations without having to know all the details of the data structures. We simply need a data report to be able to ingest the data into the newly set-up product on the platform, breathing new life into old data. The software is intuitive and easy to work with so once the data is migrated, your employees will be able to use the platform with minimal training. If anything, their work will become much simpler.
Myth 2 “Digital Transformation is too Expensive”
With modern application architecture and its integration abilities, it’s possible to put a progressive project together that migrates data and functionality over time and integrates with legacy systems during the transition. This reduces the initial cost of the process while making sure that you can innovate for new solutions and migrate data in a planned and controlled way, with the cost of digital transformation spread over time.
This transformation can be implemented in one line, department or product of your business at a time. Once your first mini-transformation shows traction, it becomes easier to get business-wide buy-in for an enterprise-wide overhaul of all customer-facing processes.
SaaS solutions can be scaled easily, empowering insurance carriers to grow their digital footprint as needed. Also, what businesses don’t consider is the cost of keeping existing legacy systems for the next five years. Consider:
- What will the cost of running a legacy system add up to over the next five years?
- What is the cost of the people needed to perform functions that a digital system could automate? For instance customer self-service, which reduces load on call centres.
- What would the saving opportunities be if system changes took weeks rather than years?
Myth 3 “Third Party Integrations are always Painful”
They don’t have to be! Good digital systems, which are built API-first, have many integration points and lots of flexibility in how they can integrate. This means that third party integrations can be achieved within a couple of weeks, rather than months. Fast, successful integrations also depend on sound planning before you start – and making sure that you put the right technical architecture in place to expand integrations over time. If you work with Click2Sure, our expert team would sit down and help you to define the right steps to making integrations seamless.
Myth 4 “Transitioning from legacy to SaaS would take months”
Actually, the most common delay in digital transformation comes from teams being averse to change, rather than from the technicalities of the actual migration. We also can’t emphasise the importance of thorough planning enough. If things are well planned up front, it can take a very short time to complete a migration from legacy to SaaS. Our team has implemented some migrations in as little as a week. Generally, it takes
anything from a couple of weeks up to three months to complete a migration, depending on business complexities and how well teams work together to complete the project.
Myth 5 “Digital transformation is about distribution”
Sure, insurance distribution is one of the most obvious and primary areas for digital transformation. Consumers are increasingly moving more of their lives online and their expectations when it comes to buying insurance are now in line with what they get from Amazon.com, Netflix, Uber and other service providers. Their expectation from insurers is the same simple, quick journey as they get when ordering food, renting a movie online or
booking a car service. But what about administration and reporting?
- With our insurance SaaS you can digitise policy administration functions from endorsements to claims management and collections, with compliance ensured throughout, as well as drive operational excellence and increase productivity. Our SaaS makes any administrative process smoother and as automated as possible, meaning happier customers too.
- With our Business Insight and Reporting module you would replace Excel documents and enable real-time business insights. That would help you to design products more responsive to consumer needs and more profitable to your business, since you would have an overview of your business mix and can quickly determine your most and least profitable product lines.
Myth 6 “A vendor package would be too inflexible and prescriptive”
Most insurtech platforms use frameworks that suggest best practices for managing products and business processes, but they don’t necessarily deliver a template for a fully configured and coherent business model. SaaS insurtech platforms, like ours, are customised for specific customers and their specific needs, and their functionality can be expanded over time to continually grow in response to industry needs and regulatory requirements. We would be building software into your business, rather than trying to squeeze your business into our software.
Myth 7 “Digital transformation is about technology and systems”
No, it’s actually about putting the customer first. Customers’ needs are changing fast. Today they interact in the digital space across most
market sectors, and they expect the same from insurance companies. Insurance companies need to continuously innovate in order to improve the customer journey and remain relevant.
As an insurer, you should be continually asking yourself whether your current mode of operations stands up to customer expectations. For example, customers might have the expectation that you would pay out, after a loss, within a couple of days. If you can’t accomplish this with your current claims processes, it is time to digitise, automate and optimise. Technology should always be implemented to improve the customer experience, never just for technology’s sake.
Myth 8 “It’s about moving from physical to digital”
No, it’s more of an omnichannel approach. The key to success lies in completely integrating physical and digital channels to give your
customers omnichannel, 24/7 access – no matter whether they started their journey with you online or via a broker. Insurers have to clean up their product portfolios, find ways to integrate agent and broker platforms in their omnichannel plan and take advantage of customer data. Most short-term insurance products are easy to buy and should not be a painful exercise. And for the insurer, a digital customer journey incorporating chatbots and digital functionality helps you to gather relevant data and stay in direct touch with your customers.
Myth 9 “In implementing InsurTech SaaS we would need to adjust our business model”
On the contrary, our technology is merely the enabler of your business model. Your business strategy should drive what technology and tools need to be implemented to optimise delivery of your business model. Yet technological transformation is also a kind of insurance for your insurance business: In order to maintain business continuity, any company needs to be able to respond quickly to changing environments, economics, natural disasters and continuously shifting customer expectations. Digital transformation allows insurers to be prepared for the unknown future.
An outdated IT infrastructure should never be a stumbling block in unprecedented times, such as during a pandemic. For full business continuity, insurers must not only be able to weather the immediate storm, but also be ready for what’s next. By modernising systems, removing inefficiencies, addressing vulnerabilities and digitising information for enhanced access, IT can better support a new era of business continuity.
Myth 10 “New technology will instantly ensure smooth data conversion”
It’s not quite so simple. Data conversions are always hard and can be quite complicated. There are often issues with the data’s quality and consistency, especially if the insurer has a long-running book with many years of data, or if there are multiple systems that house the data.
At C2S we have clearly defined touch points that help us to manage the data conversion process as smoothly as possible. Our designated developer and customer teams own this process and, at the beginning of a digital transformation project, they determine how many years of data history should be migrated to the new platform, and what can be archived. Then there is a conversion layer built that helps to ingest this data, whether once-off or on a regular basis. There is no silver bullet for data migrations, but our expert team has knowledge and experience to deal with it in a highly efficient manner.”
Most insurers know that they simply must transform digitally in order to retain and attract customers in the era of digital-first commerce. Yet the traditional insurance model has prevailed for decades – and familiarity breeds a great reluctance to accept change.
In this article, we have unpacked the major misconceptions that prevent many traditional insurance companies from pursuing digital transformation across their insurance value chain: cost; time; business disruption; complexity of migration; the challenge of migrating employees; effects on the existing business model, and more.
Now we invite you to a frank conversation with our specialised team, to allay any doubts you may still have – and to collaborate in moving your insurance business to the digital forefront – send us a convenient day and time to call you.