A recent State Street report, “Platforms for Growth: Technology Innovation in the Insurance Industry”, shows that only 28% of respondents think that their firm’s current technology strategy is completely aligned with their business priorities. 86% of the 300 respondents state that they are still challenged by Legacy IT issues. Recent research conducted by Ovum, shows that insurers believe that cloud technology will transform the insurance industry within five years, so now is the time to invest in a technology upgrade.
According to insurers interviewed, they are keen to invest in technology upgrades to meet changing customer demands, keep up with regulatory requirements, compete in the market, and deal with growth in business volume.
Changing Customer Demands
Legacy systems are holding back insurers from advancing their technology solutions to provide data analytics on existing data siloes, while also preventing mobile applications from being implemented. These technology investments require a level of integration that legacy systems can’t fully provide.
Customers changing demands are a major driver of technology investment for 78% of insurers surveyed. With customers demanding multiple distribution channels, and on-demand access to claim details, now is the time for insurers to act.
With regular regulatory changes to the ACA, and impending changes to the ICD codes along with insurers own requirements, there is reason to upgrade technology to ensure regulatory compliance.
Legacy systems traditionally consist of a number of add-ons that have been built, but aren’t fully integrated into the overall system. When investing in technology, it is important to ensure the technology provider is willing to assist in implementing upcoming and unforeseen system changes. This will ensure the new system will last and remain operating at full capacity for its lifetime.
The insurance industry is extremely competitive, with mergers and acquisitions constantly changing the landscape. The insurance industry has moved from a policy centric to a customer centric world, with insurers focusing on providing modern technology solutions to customers. Staying up to date with technology trends allows insurers to maintain competitive advantage through improved customer satisfaction.
Insurers utilizing multiple distribution channels as sought by customers, can aim to target new markets by offering customers options they want, but can’t obtain from competitors.
Growth in business volume
As businesses grow, it is important to ensure the claim process is efficient to keep costs down. The use of automation, mobile applications, data analytics, and fraud detection can all assist insurers in allocating resources to effectively grow their business, while keeping overall business cost low.
Cloud technology adoption is on the rise, although insurers worry about the disruptions associated with implementing new software. At ClaimVantage we use an iterative process to ensure your business can operate at full capacity while the project is underway. To learn more contact us today.