Money where your mouth is: on the need to modernize insurance tech stacks

Tim Hood, VP, EMEA and APAC, Hyland


Once upon a time, starting an insurance company was a predominantly physical process. You needed immense capital, an actual location from which to run your business and the infrastructure to support operations and staff – which usually necessitated huge investment in physical and on-site data storage.

But times are changing. Many consumers – and business owners – would now see this business model as archaic.

Modern competitors operate almost entirely online, with a customer needing more than a login and a device of their choice to conduct business. From taking out a policy to First Notice of Loss (FNOL), it’s now possible for a customer to complete their transaction without having to speak directly to another human being.

The behind-the-scenes infrastructure in such companies reflects that reality. Rather than being absorbed into one gigantic on-premises solution, customer data moves at great speed between physical and cloud-based storage – accessible to those who need it, when they need it.

It’s this type of infrastructure that enables the slick, agile customer experience required for companies to establish themselves as ‘challenger’ organisations. If traditional institutions fail to adapt, they’re at risk of being outmanoeuvred by their competitors.

Tim Hood

The customer’s always right

What makes the threat of challenger brands so severe is that we know consumerisation of the insurance industry is here to stay and grow.

The modern customer is more informed, technologically literate, and demanding than ever before, with lockdown restrictions during the COVID-19 pandemic sparking the biggest drive towards ecommerce since the dotcom boom. They want to be able to access information like policy or claim documents at the touch of a button and through a channel of their choice. Without that, they have the confidence and shrewdness to move elsewhere.

In response to those rising standards, young companies are adopting a customer centric approach to differentiate themselves from bigger players. Whether that’s a slick customer experience that one might associate with a mobile app or turning to social media platforms as other marketing and feedback channels.

Alternatively, traditional companies aren’t exactly renowned for their usability or their customer service. Balancing cumbersome legacy systems against the severe legislative pressure not to make any mistakes, most have taken the path of least resistance and applied hot fix after hot fix to their incumbent technology, rather than invest in a platform that supports a more modern approach.

Consequentially, emphasising a customer-centric experience is not only more likely to enamour a consumer, but directly expose the weaknesses of companies that cannot match the tech stack, or the agility of data, that modern competitors can boast.

In with the new…

Modernisation requires a new approach and a new infrastructure. Regardless of the specific solution, that new system needs to prioritise data above all else.

Businesses need to be able to manage and maintain an ever-expanding amount of content and data. Also, they need to provide documents to both customers and staff in a persona-appropriate way. Companies need to be able to leverage and handle the potentially billions of files or datapoints and they can’t do so without the ability to access and trust their findings.

With the volume of business data exploding, the system that manages this also needs to be scalable – to be able to grow, or shrink, as needed. A rigid alternative would suffer from the same weaknesses as legacy storage.

This combination – immense access to data, within a system that can change size as the company requires – is the basis of the disruptor’s advantage. The consumer functionality that some organisations are able to offer, from ease of use to clarity of information, is built upon a system with the firepower and versatility to prop it up.

…and out with the old

By contrast, incumbent legacy systems have disparate archives of data smattered across different departments. Each department will be privy to partial data sets, with no way of affirming what they – or others – are missing. And these systems aren’t scalable. They either have a maximum capacity or simply aren’t financially viable to expand.

Without the agility to access data when it’s needed, the foundation of consumer-centric insurance technologies crumbles. Modernising while relying on a rigid, patchwork tech stack is like building on quicksand – and a failure to adapt is what has led many companies to this difficult position in the first place.

Transition is no mean feat. It’s not simply a case of replacing one system with another, which in itself can be an intimidating undertaking.  But we know that the insurance sector is privy to rising expectations from a consumer base that is used to a slick, curated user experience. And we know that lumbering legacy solutions aren’t sustainable in the medium-to-long term.

Undergoing digital transformation is an inevitability for businesses that want to continue to survive and thrive in insurance. From taking out a policy to FNOL, the less technologically astute organisations are, the less likely they will make a good first impression which has ramifications across the board.

The volumes of customer data that are received, and the expectations that those customers have for its use, cannot be managed and met without technological evolution.


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