This recent headline caught my attention.
“Adapt to survive an uncertain future, warns insurtech start-up founder”
The thrust of the article was that Insurers are being held back by legacy systems. The author contends…”With new technologies constantly being developed and clients that live in the online world, the client relationship is being transformed and insurers need to figure out which course of digital innovation to follow.”
We are a software company so self-evidently we are excited by the huge potential of new technology, but this statement worries me. I have no argument with the fact that Insurers are being held back by legacy systems. Indeed I have waxed lyrical on this subject over many blogs. What I take issue with is the statement that insurers need to figure out which digital innovation to follow.
How do Insurers adapt?
Insurers need to figure out, and keep figuring out, what their customers want. Only when they understand what they need to deliver should they seek out the right technology. Expecting insurers to follow insurtech trends seems to be putting the cart before the horse.
So how do Insurers adapt? From a technology perspective it is about focus and looking beyond the familiar.
- Define the business strategy. Understand how you want to support your customers now and in the future. Honestly assess if the strategy can be delivered by the existing technology in a timely and cost effective way. IF NOT:
- Agree a short list of potential technology solutions. Do not make the mistake of looking at the same set of providers. Choosing technology on brand awareness alone is no guarantee of success. Look for providers that have rich functionality but are also cost effective. There is a good reason that vendors can do both.
- Set strict assessment criteria. For example these could include:
- Overall customer experience
- Ease of implementation and change
- Ability for the business to be self sufficient
- Cost of ownership
- Integrity of the supplier
Choosing technology can be daunting, especially given the choice in the market. However, it doesn’t need to be difficult. Once you have clearly defined your business goals, you can then find a solution that fits and a company that you trust to deliver.
Insurers certainly do need to adapt to survive an uncertain future. The way to do this is to understand and deliver what customers want. Choosing the right technology will be crucial; however it is only one piece of the jigsaw. Success will ultimately be driven by the right leadership, company structure and culture. Legacy is not just about technology.