Addressing digital roadblocks to accelerate insurance legacy systems modernization.
The insurance industry is witnessing an unprecedented disruption as digitalization takes center stage and the needs of millennials evolve. More industries are turning to new approaches to thrive and survive in today’s digital business environment. Organizations in the insurance industry must meet radically increasing digital transformation demands or risk falling behind.
Digital transformation projects present a valuable opportunity for organizations to transform traditional insurance processes and build the future of CX in insurance. Currently, though, many of these digital transformation projects fail to reach completion or lack the focus required to provide a true advantage. As a result, insurance legacy systems modernization efforts are falling through the cracks.
The truth is there are underlying digital roadblocks in modernizing the insurance processes that often go unnoticed. And no matter how many investments are made in digital transformation initiatives, if these roadblocks are not addressed, most projects will remain a non-starter.
Legacy Technologies
One of the main challenges facing insurers is legacy technology. Traditionally, the insurance industry heavily relies on legacy technologies and that is fast becoming a problem for companies. Timeworn legacy systems cost insurance firms more than any other industry. Not without a good reason, many organizations are deeply entrenched in monolithic legacy architectures including mainframe technologies, COBOL, and RPG applications. Insurance organizations are seeking to move digitally forward by developing digital-age products and solutions. However, upgrading these archaic systems has been rife with challenges for most insurance companies. These legacy applications that belong to the bygone era require major efforts to upgrade them. The entire process is riddled with complex time-consuming processes.
Most organizations do a lift-and-shift to the cloud on the promise of improved performance and scale. However, they later realize how operationally difficult it is when it comes to the implementation part. They don’t realize that moving non-compatible legacy applications to the cloud, can lead to challenges during re-hosting. Enterprises need to realize that a move to the cloud requires an incremental and well-architected approach. Only then it will rapidly deliver business results while ensuring minimal disruption to existing applications.
Security & Cloud Strategy
Organizations are suffering from lack of visibility and control, data breaches and downtime, lack of cloud security architecture and strategy. A move to the cloud should make insurance companies agile, but it often adds complexity to maintain security, especially in a hybrid environment. Complex applications landscapes across cloud and on-premises amplify security issues.
As applications and data sources explode so does the challenge around finding the right cloud architecture for security increases. While cloud providers have become masters at designing and presenting interfaces and APIs that enable insurance organizations to manage and interact with cloud services. They seem to forget that poorly designed APIs could make insurance organizations vulnerable to data breaches.
When moving more legacy applications to the cloud, insurance organizations must get the security basics right from the beginning. Despite the strong focus on security efforts, many organizations do not believe their cybersecurity programs are robust enough. The challenge lies in focusing on and fixing critical security vulnerabilities before they are identified and exploited. Fortunately, this is easy to achieve with the right set of guidance on Cloud Security Assessment.
The rise of connected ecosystems in insurance
With the rise of connected ecosystems, today’s insurance organizations can meet business objectives-whether keeping up with the fast-paced changes that digital transformation demands or delivering superior customer experiences. Insurance organizations value traditional ways of doing business and by nature are averse to change and risk. Insurance businesses that seek to thrive in the face of change need to have one thing in common: Resilience.
However, building resilience requires digital capability. It is important to realize how devising digital solutions that can make it easy for users to connect and connect to multiple touchpoints together, such as mobile, IoT, physical locations. To continuously deliver customers with the highest level of service, – and drive operational efficiency and effectiveness– insurance organizations must integrate the connected ecosystem in their way of working. Adopting connected ecosystems in insurance looks quite simple but organizations need to be aware of costs and issues associated with its implementation.
Conclusion
Insurance companies witnessing radical change- driven by shifting economic activity, rapidly changing customer expectations, and increased threat from new digital entrants. Modernization is the key need for insurance organizations today. Despite many organizations experimenting with modernization, only a few have been able to successfully extract value sustainably. Modernizing and transforming insurance processes requires careful assessment, planning, and project management. Learn how to simplify your path to modernization—while minimizing risk and disruption to your business.
