HOW DO INSURANCE COMPANIES REMAIN COMPETITIVE?
Written by Zahid Jiwa, VP UK&I, OutSystems
Today, technology plays a critical role in defining the services an insurance company can provide to its customers. However, the insurance market is now much more complex than ever before. In this blog, I will tackle some of the issues facing insurers today and explain how OutSystems helps insurance companies overcome such challenges.
Market challenges and what you need to do to overcome them
Insurance companies need to be able to respond quickly and efficiently to market needs. New online entrants and comparison sites are flooding into the market, putting added pressure on the bottom line and creating a greater need for traditional insurers to deliver more profitable business. But heavily reliant on legacy systems many of the traditional insurers lack the agility that the new web-based online insurers can offer. There is also a global dynamic. As insurance companies continue to expand in new geographies so they need flexibility to scale fast.
New applications need to integrate seamlessly
This, combined with the growing demand for e-trading and increased collaboration between partners, makes it a challenging albeit exciting environment for insurers. To keep pace they need new applications that will integrate easily with their existing IT and legacy systems. Any new technology must offer the flexibility to cater for business change, while still providing control and the ability to seamlessly integrate with backend systems, some of which are over 20 years old.
In an effort to become a more agile and more profitable business, insurers must look at new ways to drive down costs and also become more responsive to customer needs. Here are a few ways that insurers are accomplishing this:
- Many are introducing new self-service customer and partner portals and increasingly getting customers online to answer their own questions rather than calling through to customer service centres. In order to do this self-service portals need to be intuitive, easy to use, integrate with legacy systems or systems of record.
- To meet the demands of today’s consumer, insurers need to make sure that any new service is mobile or tablet friendly so that customers can access their policies from any place, at any time. As a result many insurers are now delivering device-friendly solutions that meet the needs of the mobile generation.
- Bringing new products, new services or a new line of business to market isn’t straightforward. Any new product needs to integrate with existing and complex backend systems managing multiple policies and a plethora of data. So make sure you consider your integration requirements carefully.
Understanding the cost implications
Cost is another key consideration and in the past, insurers have found themselves locked into multi-year technology investments, which have made insurers wary of starting new lines of business, or launching new products or services. For example:
- The upfront costs and capital investment required to bring new products and services to market can be very high and therefore something of a gamble.
- However decommissioning their existing legacy systems is also prohibitively expensive, especially if there is nothing intrinsically wrong with them.
- As a result, risk adverse IT departments are loathe to tamper with or change their systems and are therefore slow to introduce new technologies or respond to change or new service requests from the business.
Don’t let Shadow IT creep in
The net result is that this then creates Shadow IT situations whereby line of business or individual departments, especially those out in regional offices start to introduce their own offerings or products, creating a work around, viewing IT as slow, and by default unable to support their requests. Individual business departments end up purchasing technology and running their own applications, storing data in silos rather than in one centralised system. Shadow IT is where applications are built, installed or rented outside of IT’s control and without IT’s involvement. This causes insurers more cost and control issues, and if anything, makes their IT environment more complex, less efficient and less streamlined.
Strong insurance credentials
At OutSystems we have a strong history of working with insurance companies, helping them bring their systems into the 21st century. Our mobile and web application development platform drives efficiencies, helping insurers quickly and easily bring new projects to market at a cost effective price point.
Here is a great example:
OutSystems helped one of the leading life and non-life insurance market operators in Europe merge the technology infrastructure of four insurance companies into one. Back in 2008 the parent company was trying to achieve a merger with an outdated IT architecture that simply couldn’t deliver what it needed to take the business forward. It was a very fragmented environment with a complex mix of different technologies and teams. With a limited skills base there was huge pressure on the CIO who chose to implement the OutSystems Platform, which allowed the insurer to speed development and do more with less. OutSystems helped the insurer create a standard for application development and over the years it has helped the insurer implement new technologies, bring new products and services to market and compete on a global scale.
The need for a flexible, agile development environment
This is just one example of many where we have helped insurers remain competitive whilst updating their systems and bringing new projects, products and services to market. The world of insurance will continue to be a complex one with stringent requirements and a lot of external pressures. OutSytems has a flexible and agile development platform which helps insurers manage change whilst ensuring that their systems are meeting the needs of their customers and enabling them to better respond to competitive pressures.