Welcome to an ‘open’ insurance environment

The traditional insurance model is under pressure to meet the requirements of a digital environment. Partnerships between incumbents and insurtechs are becoming more commonplace and provides customers with alternative value propositions. JC Oberholzer, Group CIO at SilverBridge, believes this will result in the increasing adoption of open systems as an effective enabler in this new landscape.

“Given the growth of data (and the sources generating it), a new ecosystem is emerging. You have the suppliers of connected devices capturing data and you have companies developing solutions based on that data. And while insurers are cooperating with organisations on both sides, they will need to escalate this if they are to differentiate themselves and remain relevant for increasingly fickle customers.”

While it might have been good enough in the past to capitalise on opportunities by effectively organising business processes, the more connected digital environment necessitates interactions between very different users who are engaging with companies in new ways.

A ‘real’ omnichannel

“Thoughts typically turn to the role omnichannel will play in aiding insurers to better understand customer needs. Cynics might argue that just because things are now digital, traditional business rules should still apply. And while there is an element of truth to this, a modern omnichannel is about more than just delivering a seamless experience. It is about harnessing all elements of the process and using those insights for a more customised (and unique) product offering.”

One of the key elements to emerge from the omnichannel of the present is the need to have architecture that links together. Consider how complicated insurance systems are inside the business and how organisations often use a myriad of solutions across divisions. Getting these to talk to one another and gain insight are challenging at the best of times. Now factor in the growth of external partners and having to deal with the complexity of their systems and you have quite a volatile mix.

Getting systems to integrate (both internally and externally) should be one of the top priorities for insurers in the digital world. Of course, overcoming legacy challenges and getting older systems to ‘talk’ to newer ones is not an insurmountable challenge but it is a difficult one.

Open architecture

“Fortunately, open architecture and systems that enable this are not a new thing and have been in use for several years. However, it is now case of becoming a business necessity instead of just being a nice-to-have that is refocusing insurer priorities around the concept of openness.”

Some might think that adopting open solutions mean ripping and replacing what has come before. This does not have to be the case as following open architecture principles allow for integrating with existing policy administration systems and introducing a modern customer experience layer on top.

Not only will this enable a more user-friendly customer engagement model, but adopting an open approach will also result in being better able to integrate and benefit from external partnerships.

“Open architecture is as much a technology principle as it is a process one. Decision-makers need to give careful consideration on the impact on their insurance business if they are not willing to fundamentally shift their focus and integrate better with others. After all, it will enable different business models that lets the insurer not only compete more effectively with insurtechs but also give them the opportunity to collaborate with them. It all comes down to providing more value to customers.”