Embrace Technologies And Thrive In The Modern Insurance Landscape

The surging need for personalization, shifting consumer behaviors, and escalating environmental and financial concerns have propelled various industries to embrace cutting-edge technology. However, insurers have traditionally been careful when adopting new technologies due to the nature of their business and interdependencies. Amidst increasing instability, carriers are now re-evaluating their conventional operating models to generate value and thrive in this dynamic landscape.

Along with core platforms, insurance organizations must focus on digital, data, and cloud to enhance customer experiences, facilitate intelligent decision-making, automate data governance, and tackle fraudulent claims. For a successful modernization process, insurers must reassess every facet of technology, updating legacy systems and connecting isolated systems to drive tangible outcomes.

Impact of legacy technology landscape

Many insurance companies continue to depend on legacy technologies, complex processes, and closely coupled architecture, impeding their capacity to seize market opportunities and adapt to evolving customer needs. As per industry analyst reports, 68% of organizations expressed that their objective for digitization is to transform their operating model. Dual speed IT – Combining the traditional model of core systems hosted on-premises and new systems hosted on the cloud proves costly for carriers. Such a model lacks scalability and maintainability in the long run. Consequently, it becomes difficult to maintain and develop new features, resulting in huge technical debt.

Creating a roadmap for technology adoption

Successful digitization is crucial in any modernization journey. Initiating this process aptly involves securing real-time data access, streamlining operations, and diversifying service offerings. Insurers must not treat transformation journeys as technology projects—they should address them with a broader perspective to avoid budget overruns, resource wastage, and missed opportunities.

However, a roadmap to technology adoption doesn’t end there. It has to be continuous and experiment-driven, along with insurance carriers striking strategic partnerships and initiatives to offer elevated customer experiences. This includes:

A shared vision that aligns with all the stakeholders within the insurance organization is a critical target for leaders. Enabling real-time data exchange between all stakeholders will allow for the experimentation of new concepts like parametric insurance, on-demand coverage, and other tailored solutions.

Omnichannel integrations can elevate carriers’ portfolios from simple app-based insurance claims to virtual assessments for claim management. Advanced analytics and AI can help them understand customer behavior and personalize offerings accordingly.

New-age technologies like AI/ML, augmented and virtual reality (AR/VR), voice-enabled technologies, IoT, etc. can truly transform insurance. These technologies can generate detailed data on risk assessment, claim processing, and customer engagement, helping insurance organizations improve customer-centric services, streamlined operations, and customer value.

ESG (Environmental, Social, and Governance) considerations are another way to view a 360-degree business transformation. From climate change governing the prices of premiums and promoting the equitable treatment of all customers to adopting technology that will ensure transparency in transactions – these become crucial.

The 3 I’s of maximizing value: Insurance, Insurtech, and Innovation

Insurers must opt to experiment continuously to build a culture of continuous innovation and enhance benefits. This involves newer technologies that will function seamlessly with in-built tech ecosystems. Amidst this, insurance executives may face a fundamental question: How can we harness the myriad possibilities to extend insurance applications into diverse industries, such as e-commerce, travel, agriculture, and education, while implementing an omnichannel approach? A more extensive customer base unravels here, and a crowd-based economy thrives, giving way to the embedded insurance model.

A customer-centric approach invites hyper-personalization. This is where benefit-led and usage-based insurance features. With a projected growth of $149.22 billion by 2027, it’s time carriers explore customizable plans and flexible insurance premiums.

As insurers traverse from the web to the AI era, the journey is marked by the convergence of traditional insurance stalwarts, burgeoning Insurtech entities, and rapid innovation. The paradigm shift can empower providers to adeptly harness the advantages of sophisticated technologies such as advanced neural machine learning (ML), AI, and the Internet of Things (IoT) to stay relevant in the marketplace and overhaul competition.

Among the companies that commenced their digital transformation journey, only 30% could meet or exceed their goals, creating value. Therefore, providers must have a well-rounded, extensive blueprint to ensure higher success rates.

Case in point:

HTC assisted a Fortune 100 US-based insurance company specializing in property and casualty (P&C) in comprehensively transforming its business ecosystem. The enterprise looked forward to addressing customer needs by modernizing, upgrading, or replacing legacy systems. Based on our contextual domain knowledge, we thoroughly assessed the client’s existing infrastructure and business goals.

The client leveraged Guidewire, an industry-leading P&C insurance platform, to accelerate cycle times, implement feature enhancements, modernize systems, and re-engineer processes. Our solution empowered the enterprise to achieve enhanced scalability, accessibility, compatibility, and extensibility, leading to a superior user experience.

Way forward

The projected market size of global Insurtech firms will reach USD 172.6 billion by 2030 at a CAGR of 37.54%, highlighting the increasing technological innovations in the insurance industry. Recognizing this pivotal moment, carriers must actively engage with Insurtech firms to accelerate their modernization processes.

HTC is well-prepared with advanced technology and skilled professionals to empower insurance firms to embrace emerging technologies and contribute to the greater social good. Enabling insurers to function as a robust financial safety net, HTC facilitates a transformative approach that equips carriers to mitigate losses, minimize impact, and bridge the gap between life and non-life protection. Drawing upon its proven experience in the insurance sector, HTC supports carrier leaders in seamlessly integrating pioneering technology platforms into their ecosystems. This includes incorporating modern authentication and authorization capabilities in their technological investments, ensuring alignment with the latest regulatory guidelines.