Modernization of technology can make a significant impact across many parts of the insurance industry, including underwriting, policy administration, and claims. Research shows that the potential benefits of modernization include a 40% reduction in IT cost, a 40% increase in operations productivity, more accurate claims handling, and, in some cases, increased gross written premiums and reduced churn.
There are many misconceptions about technology modernization in the insurance industry, a few of these myths include:
The business impact of technology modernization is underwhelming;
Modernization simply means replacing the core platform with the best-in-class option;
Using a vendor platform will guarantee access to the latest cloud-based technology;
A vendor package will give us prescriptive guidance on how to modernize our business processes;
A simple one-size-fits-all technology solution to ‘spaghetti integration’ challenge already exists;
Modern automated tools ensure smooth data conversion;
It is always best to use industry-standard data schema;
Going from legacy to cloud-based platforms will reduce IT cost;
Getting rid of mainframes will automatically improve productivity; and
Microservices will make architecture agile and digitally savvy.
Read the guidance on approach the reality of these myths in the article here.