The insurance industry is continually being pushed towards a digital transformation. It’s not just the pressure from millennials, but there are other drivers as well pushing this change, including new market entrants, changing customer behaviour and technology.
Technology is shaking up the conventional risk-averse industry. Insurers are presented with an uncharted territory that they have to navigate and focus on three main digital priorities to compete with insurtechs – operational efficiency, product innovation and customer experience.
Insurance companies now feel the need to transform their existing products and processes. But deciding to go digital is only half the battle, especially when the industry is bogged down by security challenges, legacy systems, and resource limitations. Insurers must differentiate themselves in an increasingly crowded market.
With all the technological innovations taking place in and around the industry, insurance carriers are ready to adopt new solutions that integrate with their core and legacy systems. But modernizing their core business has been an area of challenge; it’s an expensive, long and a time-consuming process.
Insurers must focus on being digitalization, while renovating and bringing successful products into the core systems; after all, innovation and product development opportunities cannot put on halt until the business system is completed transformed.
Lack of resources is one of the biggest challenges faced by insurers nowadays. Insurance companies are actively investing in technology to refresh their core systems. To keep the core systems functioning, while also developing new insurance products, organizations must allocate a dedicated cross-functional team for product creation and innovation.
Security and Cloud Strategy
A lot of insurance companies are unsure with cloud strategy, which ends up consuming extra time, money and resources for on-premises deployment. On an average, it costs £50,000 to insurance companies to run an application on-premises infrastructure. Later, insurers have to wait for few months to provision the environment, which may degrade innovation.
If the insurance company decides to go all-in on the cloud, first get a green flag from your security officer to do development and testing in the public cloud. This will minimise time and also reduce the cost of failure. CIA (confidentiality, integrity and availability) model is another approach for determining cloud usage-based data within a specific application.
As the industry is making a rapid transformation, it’s time to invest in new technologies like artificial intelligence (AI), chatbots, etc. Insurance companies must overcome these roadblocks and start developing innovative insurance products, improve customer experiences and ensure the entire organisation is operationally efficient