7 Methods Legacy Insurance coverage Expertise Could Be Holding you Again
This submit is a part of a collection sponsored by AgentSync.
The Southwest Airways catastrophe that rounded out 2022 could have been a nightmare for everybody concerned, however there was one optimistic that got here out of it. The debacle helped begin a bigger dialog on a subject we’ve been speaking about for fairly a while now: the issue with outdated expertise. As we start the brand new 12 months, we anticipate professionals throughout all industries taking a more in-depth have a look at the cracks of their technological infrastructure and legacy methods.
Legacy expertise and the insurance coverage business usually go hand in hand
The insurance coverage business is not any stranger to outdated expertise. As a legacy business, legacy tech is par for the course. It wasn’t till the COVID-19 pandemic started inflicting enterprise shutdowns that many insurers have been mainly compelled to replace their processes and softwares so as to proceed working underneath new security tips.
In some ways, the COVID-19 pandemic was the catalyst for the insurance coverage business’s digital revolution. However, numerous carriers and companies are nonetheless counting on the outdated manner of doing issues. Why is that?
The reply isn’t easy. Some could also be frightened about the fee whereas others are extra involved with the problem of changing legacy methods. Some are simply afraid the change will probably be an excessive amount of for workers and that it’ll trigger extra enterprise disruption than it’s price. Nonetheless, if Southwest’s breakdown taught us something, it’s that no excuse is price risking the injury that outdated expertise could cause to your group, staff, and prospects.
So, with out additional ado, listed below are seven methods your legacy system could also be inflicting your insurance coverage enterprise extra hurt than good.
**We’ll be exploring these issues from an insurance coverage perspective (as that’s our experience), however many of those issues apply to companies in any business that also depend on outdated expertise.
1. Legacy expertise is cost-heavy
One of many extra frequent roadblocks we hear from insurance coverage consultants who’re nonetheless working their enterprise on outdated methods is {that a} new resolution is simply not within the finances. Whereas it’s true that the upfront prices of including extra fashionable instruments to your tech stack could also be substantial, they’re nothing in comparison with the cost of maintaining legacy systems. Selecting to maintain doing issues the way in which you’ve all the time executed them as a result of it appears simpler (or cheaper) now is named technical debt. And like most money owed, they finally come due.
The older methods get, the extra they value to take care of. Plus, legacy expertise may very well be consuming away at an organizations’ backside line in different, much less apparent methods. For instance, an outdated company administration system (AMS) or buyer relationship administration system (CRM) may not have the ability to supply the options or ease of use that staff, producers, shoppers, and downstream distribution channel companions are on the lookout for. If these prospects, staff, and companions aren’t glad with their experiences, they might take their enterprise (and their expertise) elsewhere, in the hunt for a extra fashionable expertise.
2. Legacy expertise can hurt your status
You’re employed exhausting to take care of a optimistic status on your insurance coverage enterprise. A poor status could lead on your shoppers straight into the arms of your rivals and negatively affect your backside line. We noticed first hand how outdated expertise managed to pull Southwest Airways’ reputation via the mud in a matter of days.
In the case of insurance coverage, there doesn’t essentially must be a large breakdown or error together with your legacy system to negatively affect how present and potential prospects and staff view your organization. It will also be the day-in-day-out tedium of outdated expertise that lastly will get to individuals. If you happen to proceed utilizing legacy expertise, staff, prospects, and shoppers could view your organization as being behind the occasions. And in case your technological infrastructure appears prefer it’s caught up to now you’ll have a more durable time convincing anybody of your future spot available in the market.
3. Legacy expertise might get you in regulatory bother
A serious disadvantage of legacy expertise is its incapacity to combine with newer software program. Insurance coverage professionals want methods that may talk with one another and paint a whole image of their information so as to make knowledgeable enterprise choices. The complexity of the insurance coverage business’s state-by-state regulation system means it’s essential for all methods to be built-in and up to date in actual time to keep away from compliance violations.
Updating to an automatic built-in compliance resolution (like AgentSync) can create important compliance administration value financial savings and guarantee steady producer and company compliance – with out the guide effort that you simply’d want to make sure the identical degree of compliance at the moment.
4. Legacy expertise can inhibit development at your company, service, or MGA/MGU
Legacy methods are not often scalable. Trendy issues want fashionable options and legacy expertise is usually unequipped to handle present wants. Due to this, legacy methods could be a main barrier to a corporation’s development and innovation.
The longer an company waits to replace its legacy methods, the more durable will probably be to handle present market wants and acquire new market share. If you happen to’re not able to utterly overhaul your group’s legacy methods, there are different choices that may make it easier to dip your foot within the pool of innovation.
5. Legacy expertise fuels inefficient workflows
Legacy methods can block your group from realizing its full potential. With outdated expertise, it’s seemingly your employees is spending an excessive amount of time on guide, repetitive, and non-revenue-generating duties. Not solely is that this a waste of expertise, however it additionally will increase the possibility of human error and non-compliance.
With out up to date insurtech, processes like producer onboarding and compliance administration eat up much more time and sources. Keep in mind earlier once we talked about that legacy methods don’t normally combine simply with different expertise? This lack of communication can create data and workflow silos that block data from flowing between groups and in the end decelerate processes.
6. Legacy expertise might make you extra susceptible to cyber assaults
Hackers are continually discovering new methods to sneak previous a corporation’s cyber safety measures and entry its safe information. As software program ages, it could not have the defenses wanted to guard towards newer cyber threats. Cyber safety is a giant concern for insurance coverage companies and carriers which frequently retailer huge quantities of delicate shopper data. Outdated software program might make that information extra susceptible to an information breach, bringing you proper again to earlier factors about reputational hurt and exhausting greenback prices.
7. Legacy expertise might negatively affect hiring efforts
We’ve stated it earlier than and we’ll say it once more – the insurance coverage business is within the midst of a hiring disaster. Mass retirement and a shrinking expertise pool means high-quality candidates have extra energy to decide on the place they’d wish to work. And when you assume the possibility to work with software program that predates their grandmother is an effective promoting level then oh boy do we’ve got information for you.
At present’s job-seekers are on the lookout for fashionable firms which can be utilizing the most recent expertise to enhance each the client and worker expertise. Providing producers a high-tech expertise with much less time spent on guide, repetitive, time-consuming duties might assist as you proceed to compete for expertise.
The time to modernize your insurtech is now!
The perfect by date in your insurtech has come and gone and it’s time to rethink the “if it ain’t broke, don’t repair it” mindset you will have beforehand held relating to your legacy methods. In actuality, it’s a lot better to repair the issue earlier than a serious malfunction (once more, you simply have to take a look at Southwest Airways for proof). Clearly, outdated expertise can do much more hurt than good in relation to your company, service, or MGA.
Don’t be like Southwest and wait till the injury is already executed. The time has come to throw out your legacy methods together with the issues they’re inflicting your insurance coverage enterprise. If you happen to’re able to declare your independence from outdated tech and processes see how AgentSync will help you attain your full potential.
Subjects
InsurTech
Tech
