We Might Be Missing Something

According to the calendar, it’s 2025. Yet according to print and online insurance trade publications, the biggest complaints property/casualty insurers have about their core processing software is it’s outdated, it’s inflexible, and it’s slow to adapt to changing business needs. Considering what we do for a living, this may come across as self-serving. But maybe those complaints shouldn’t be leveled at the software.

More specifically and most often, insurers tend to cite:

     1.   Lack of Agility. Core systems built on legacy technology make it difficult to introduce new products, adjust pricing, or respond to regulatory changes.

     2.    Integration Challenges.  Older systems aren’t conducive to integrating with modern digital tools, third-party data providers, and emerging technologies like AI.

     3.    Poor User Experiences. Internal users — underwriters, claims adjusters, agents, and others — and policyholder find the interfaces clunky and inefficient, leading to slower processing times and frustration.

     4.    Data Silos and Accessibility Issues. Legacy systems lack centralized data structures, making it hard to get real-time insights and to effectively employ data analytics.

     5.    High Maintenance and Infrastructure Costs. Keeping legacy systems up and running requires significant IT and financial resources maintenance and custom development.

     6.    Security and Compliance Risks: Older software wasn’t built to provide cybersecurity or to readily adapt changing regulatory requirements That spells risk.

If insurance executives haven’t kept up with technological changes, that doesn’t seem to be the fault of core processing software. But keeping up — and future-proofing the business — may be less difficult and more affordable than many insurers think.

Here’s Why

We’ll readily concede our bias again. But from where we sit, maintaining technological and competitive edges can be as simple as ABC … well … A through F:

     A.   Core processing systems worth their salt are now cloud-based. No on-premise implementations. Significantly reduced IT and infrastructure costs. Automatic deployment of updates. And scalability.

     B.   API integrations ensure access to necessary third-party systems and date sources, and they provide digital user experiences to internal and external users.

     C.   Low-Code/No-Code technologies enable business users (rather than IT department) to make system configurations, to create new products, to adjust underwriting rules, and to adjust workflows.

     D.   AI and data analytics are incorporated for underwriting and claims, enabling better risk assessment, more effective decision-making, and improved customer service.

     E.   Modular architecture makes it possible for insurers to adopt modular upgrades, rather than undertaking full replacements, enabling to prioritize and modernize specific functions.

     F.   To speed up system updates and product launches, insurers are adopting Agile development methodologies and DevOps practices to achieve faster iteration cycles, increased software improvements, and decreased downtime.

The Bottom Line

The bottom line is that your bottom line doesn’t have to suffer because of outdated, inflexible, and slow core processing software. The monolith went out with 2001: A Space Odyssey. It’s 2025. It’s time to take advantage of cloud-based, API-driven, modular platforms that integrate well with emerging technologies.

 

To be self-serving once more, that’s why we’re here. Please let us know how we can help resolve your complaints.