At this stage you have probably been bombarded with information about how crucial it is to replace your legacy system and adopt cloud technology. But is it really necessary?So your current claim system is in production, it’s working well and your business is growing at a competitive rate. Well then you probably don’t need a new claim system… Right Now. Unfortunately a lot of companies have systems in place that may be hindering their growth. Technology is continuously changing and the systems that were put in place ten or even twenty years ago (it could even be longer!) are outdated and hindering company growth.
As pointed out by Karen Pauli, Research Director at CEB TowerGroup, at the 2014 ACORD/LOMA conference, ‘Middle of the road’ insurers are spending almost 70% of their budget maintaining and supporting their current system with only 10% of their IT budget innovating business improvement. In contrast leading insurers had split their IT spending three ways, towards:
- Maintenance and support,
- Business improvement, and
- Business innovation.
According to the CEB TowerGroup Global FSI Survey 2013-2014, 17% of respondents see competitive advantage as one of the value drivers in adopting cloud technology. For the same survey in 2012, no one chose this option, which highlights the benefits insurers now see in cloud technology.
Cloud technology offers insurers a multitude of benefits, other than lower costs. Cloud technology investments allow insurers to:
- Implement a flexible and scalable solution to keep up with changes in the market, such as regulatory changes
- Improve the efficiency of claims processing
- Increase the number of claims processed
- Provide up to date technology to end users, including applications and portals
With 54% of respondents to the TowerGroup Global FSI Survey 2013/2014 planning on replacing their current system or adopting cloud technology for the first time in 2014, now is the time to start considering upgrading your claims management system.
Whether cloud technology is right for you is another topic altogether. If you would like to learn more about whether building or buying a vendor solution is best for you read this article.