Today’s insurers have two audiences to satisfy – consumers and the regulator. That calls for a two-speed approach, using innovative technologies to introduce new work practices, while also retiring older systems.
Insurance customers these days increasingly expect access to a digital service that’s fast, high-quality and personalised. At the same time, regulators are cranking up the pressure on firms to show they’re in control of risk issues, in the wake of the financial crisis.
How should insurers respond effectively?
1. Legacy IT systems
Despite being stable and easy to run, legacy systems rarely provide the rich functionality consumers demand and insurers are unable to harness the full value of data they contain.
2. Legacy organisation
As insurers move to new ways of doing business and interacting with customers, they need fresh thinkers on board: people with the skills to set up and run new work processes.
Leaders also needs to ask whether they’ve invested the level of capital needed to transform their business. There’s a delicate balance between investing the right amount in new systems and supporting day-to-day operations. Firms also need to set their timeframes accordingly.
Unfortunately, it’s not really possible to tackle these issues one at a time. Instead, insurers need to address the legacy challenge by following a “step-down” plan that indicates which parts of the business are going to move from the older systems and at what point.
Operationally, this means correctly timing and allocating staff and resources, in order to achieve a smooth transfer for legacy customers. Leadership needs to know the point in the process at which they will hit the highest service levels and find the best price points.
Insurers should be also introduce a “leapfrog” technology plan. This should map out how the business can use new IT systems to address the changing demands of customers and regulators. That means not just looking at the implementation of specific technologies, such as artificial intelligence or predictive analytics. It also means focusing on a range of technologies to create an omni-channel approach to sales, with an operating model that puts the customer right at the centre of the business.
There are three things to remember when following the two-speed approach:
Get in touch if you’d like to hear more about how technology can revolutionise your customer service and regulatory profile – and significantly boost the efficiency of your operations.
AI technologies offer major opportunities for the insurance sector.