Digital disruption challenges insurers with innovative technology trends emerging around artificial intelligence and machine learning. Systems will have to be modernised if incumbents tap deeper into the existing market. At the same time, this provides significant opportunities for core systems to evolve and effectively respond to enhanced customer expectations. Annalie Terblanche, Product Manager at SilverBridge Holdings, looks at the reinvention of the market.
“Insurers who rely on core legacy systems and processes are now under pressure to reassess their business requirements. These more traditional systems invariably impact the ability of the insurer to respond to opportunities presented by emerging technologies. The risk of being left behind is clear and present, and insurers must look inwards and investigate how best to modernise their core systems.”
Providing further impetus for modernisation efforts is the arrival of Microsoft Azure data centres in South Africa. To fully benefit from the potential that these high-performance computing environments can provide insurers, they must identify the legacy processes that can benefit most from modernisation. Small wonder then that more than $7 billion was invested in global insurtech companies in the first half of 2021. This highlights the importance of modernising traditional insurance systems and a way of thinking to reflect the need for customer-centricity better today.
“One of the benefits to embracing the disruption resulting from the need to modernise is that it provides guiding principles of introducing new business models and upending old ones using technology. The past two years have seen digital technology becoming the cornerstone of the insurance industry as incumbents and start-ups look to revolutionise the customer journey while still complying with regulatory concerns.”
Modernisation is an essential part of driving improved customer experiences. Digital-first users expect their insurers to provide them with more innovative ways of engagement.
“This means that modernisation must encompass the entire insurance value chain from the back-end systems to claims processing, product development, and automating time-intensive manual processes,” she says.
Modernising the core insurance system allows the organisation to scale according to customer requirements and embrace emerging technologies to deliver significant value to end customers. This enables insurers to innovate quicker and differentiate themselves in a highly competitive environment.
Some suggest that the future of insurance integrates efficiencies, personalisation, scalability, and agility to harness disruption in positive ways to empower insurers to future-proof their operational environments.
“The modernisation journey is not something that will happen overnight. But it does require buy-in from the top down and ongoing employee education to show the value of transforming and modernising traditional systems and processes to become more adapt at today’s demands,” she concludes.