You can’t get there from here with legacy systems
I was at an industry event a few weeks ago listening to a group of insurance CIOs who were sitting on a panel discussing digital transformation strategies and the challenges with legacy systems each of their organizations were facing. Even though these CIOs represented insurance organizations of varying sizes, one theme stuck out that they all agreed on and consistently referred back to throughout the 30-minute discussion:
It’s very difficult to get from here to there with legacy systems.
Although not rocket science, this is a very true statement. Why is it so difficult? Because the insurance world is chock-full of legacy systems – nearly 70 percent of insurance business systems today are legacy applications. In fact, insurers rely on many of them to provide mission-critical business functionality.
These decades-old core systems are ticking along just fine and over time have proven to be fairly reliable, BUT, and this is a big but, with very limited functionality. Business leaders are feeling the pressure with the market changing and competitors springing up without a single legacy system to their name – giving them flexibility, adaptability and a competitive advantage.
“While insurers have talked about customer-centricity for years, they have developed channel-centric silos instead,” said Kimberly Harris-Ferrante, Gartner vice president and analyst. “Insurers without multi-channel integration will face dissatisfied customers, rising distribution costs, customer attrition and brand risk compared to those companies with tight integration.”
Where is “there”?
Today, insurance customers and clients want and expect the same type of technology-enabled interaction with insurers as they enjoy with any other company they do business with. They have powerful apps on their phones that enable them to do what they need to do on the go.
The digital bar for insurers is high and rising – over 80 percent of insurance customers want personalized and just-in-time insurance, according to TechBullion. Those companies that can meet this challenge will build greater customer loyalty, cut costs and improve profitability.
Digitizing business processes can deliver significant short-term gains like reduced costs, lower error rates and increased customer satisfaction for carriers across all business lines. So far, most carriers have not fully embraced the opportunity. Many have not because they expect their legacy systems to be a huge obstacle, when the reality is most insurers can wrap and extend many of their processes without making changes to their underlying technology infrastructure.
Carriers are digitizing processes to achieve increases in both efficiency and customer satisfaction, often without major technology infrastructure upgrades, and in unbelievable time frames of just weeks or months, as opposed to the years many of them are accustomed to.
Claims processing and servicing in particular are optimal areas for digitization. P&C and life insurance carriers have as much as 30 to 40 percent of their expenses locked up in their top 20 to 30 core end-to-end processes, McKinsey estimates. Additionally, for many carriers, there are numerous smaller-scale processes involving the needless pushing of paper and duplicative tasks that they can cost-effectively digitize over short time frames.
Can you get from here to there?
You may think your core imaging and document management systems are doing just fine. But are they? Take a step back and you might find they are a little outdated. And that accessing and sharing information is nothing but frustrating.
In order to maximize your customer experience and operational efficiency, you need to replace your legacy applications with modern, flexible insurance software that is easier to manage and maintain. Insurance software that reflects a more integrated approach to content, cases and processes.
You need a single platform that is configurable and scalable. One that can easily integrate, wrap and extend legacy systems with new modern core systems. This gives you better access and greater control of your information in a safe and secure environment.
It’s time to let go of legacy and start thinking about the future, today. We can help get you there.
