Insurance companies are all about managing and reducing risk. So it is ironic that most companies are taking one of the biggest risks – outdated technology!
Remember the 80’s? A time before smartphones and tablets. A time when many processes were still manual. A time when field staff hit the road with paper documents instead of automation. Hard to believe but that is still happening on a broad basis in the insurance industry and unfortunately it can cost companies a lot of money.
Some companies have infrastructures and core systems dating 20 or 30 years which can lead to numerous challenges for the growth of their business, including:
- Customer needs and competitive advances have evolved at a rate much faster than older technology can keep pace or the architecture can support.
- The cost is high for keeping these systems functional, compounded by an aging workforce with the inherent knowledge necessary to maintain and enhance them.
- Attracting and retaining younger technical talent to work on outdated systems become a challenge as a larger number of the knowledgeable workforce approaches retirement.
It is not just about age; it’s also about rate of change
Technical infrastructures don’t have to be that old to be outdated. Technology is growing and evolving at a rate never seen before. Simply looking back 5 years, we see the tremendous progress that has been made and at an increasing pace. And when technology advances, customer expectations grow. By having outdated technology, insurance companies cannot keep up with the needs and demands of their customers. While these systems can ‘get the job done,’ they are falling more and more behind other companies and industries and this is only compounded by technology companies like Google entering the insurance industry.
Unfortunately, according to Nazz Baksh of Peace Hill Insurance, “companies are often hesitant to dip their toe in the water and take advantage of technology that can help them quickly respond to opportunities and increase the customer experience.” Moreover, different departments in the same organization are using different systems, making it more expensive to maintain, less effective to share information across the organization, and negatively impacting client satisfaction.
There is a belief that the cost of replacing this technology is prohibitive and will be too disruptive to the business. This is not true. Newer technologies have made huge advances to minimize or even eliminate these obstacles. Don’t get stuck in a technology rut. Building on top of old systems will only end up costing your company a lot of money, while increasing risk. Let the 80’s have their technology back and start thinking about how to support your business for the next 10-20 years.