The insurance industry is not known as an early adopter of new technologies or cutting-edge innovation. move forward, forcing companies to adapt quickly and modernize or die. But insurers need to modernize and evolve to stay relevant and better serve and meet the needs of their customers. Modernizing your policy administration platform is key to delivering the flexible experience customers expect today, but how you do it is just as important as the execution.
Update current technology or start from scratch?
Undoubtedly, there are huge benefits of moving to a modern platform, but our industry has notoriously kickstarted the modernization of our core administration engines. Over the years, operators have built environments around central hubs to connect the old system to the new world, trying to reach today’s customer. This approach seems to assuage the need for updating, but it is not sustainable. This adds more complexity to existing ecosystems, increases maintenance costs, and fails to mitigate much of the risk present in legacy systems.
The modern approach to policy administration enables enterprises to take advantage of event processing and API integrations, enabling real-time processing that provides immediacy to our customers. It’s about providing instant, event-driven interaction for policyholders, providing a sense of true ownership and transparency.
Stakeholder buy-in and approach
As with any technology modernization effort that impacts platforms deeply embedded in business processes, greenlighting change often requires a deliberate internal campaign to demonstrate value. The hardest part is presenting the financial benefits – showing a true understanding of the financial model that supports the business model, reinforced by a clear illustration of the enhanced values.
businesses to take advantage of event processing and API integrations, enabling real-time
treatment that offers immediacy to clients
To replace the policy administration system, you need to rework the entire business process and evolve the existing ecosystem, leveraging new capabilities and templates to eliminate the complexity and manual workarounds that have become the status quo. what. Along with pure IT cost savings, weigh the risk of not modernizing, resulting in a crippling inability to compete in real-time functionality and speed-to-market. It gives insurers the ability to quickly update and sell new products, and provides customers with quick access and updates.
A key driver of savings from modern policy administration platforms is collaborative consumption – vendors that offer shared platforms on a cost-per-policy model are significantly cheaper than cost-per-policy that policyholders will pay on an internal platform. These configurable, out-of-the-box digital software platforms include a chassis to support your entire policy lifecycle. You could essentially reduce your IT cost per policy by 50% or more. We have seen the cost per policy drop significantly as an industry standard thanks to collaborative consumption platforms.
You won’t get this benefit by trying to build your own custom rig. Insurers do not seek to differentiate themselves from their competitors through their core policy administration platform. They won’t sell fonts anymore due to a custom system and will have a hard time convincing their distribution teams to sell it as a benefit. Simply put, it will be very difficult to prove this value.
A flexible, current and configurable out-of-the-box policy administration system is table stakes today if an operator hopes to adequately support the products and services it provides and create fast and robust access to these products for customers. This modernization is essential to meet the expectations of today’s customers and keep pace with the market.
Lincoln Financial Group is the trading name of Lincoln National Corporation and its subsidiaries. The views expressed are those of the author as of the date indicated.