Insurance firms today are under a lot of pressure to modernise. The market is more competitive than ever, meaning claims leakage has a real impact on insurers’ ability to operate; meanwhile, the insured have come to expect faster response times, a greater range of products and a higher quality of customer service. Yesterday’s claims handling systems simply weren’t designed with these demands in mind.
As such, many firms are finally getting around to replacing their decades-old infrastructure with newer, shiner solutions that provide a level of automation, scalability and user-friendliness more befitting the 21st century. Some of the best-known examples include Guidewire ClaimCenter – a Gartner Magic Quadrant leader for property and casualty insurance – and IBA IBSuite.
However, implementing a new claims handling system can be an extremely time-consuming and costly undertaking. Unlike some of their predecessors, modern solutions tend to provide end-to-end functionality that improves information-sharing and reduces the manual rekeying of data; the side effect of this is that if the underlying infrastructure turns out not to be fit for purpose and future-proof, the firm might end up with a burdensome legacy system far sooner than it realises.
Could this fate befall your new claims solution? Here are a few factors you might want to consider before pushing ahead with a planned upgrade.
Will it improve claim lifecycle times?
It should be obvious, but it’s important to remember that many of the selling points of modern claims handling systems, such as automation, are only a means to an end: they’re supposed to make the claim lifecycle faster and more accurate, and thereby save you money. If your new solution can’t offer quantifiable improvements over your old one, no amount of bells and whistles will compensate – it could become a liability very quickly.
Is it cumbersome and difficult to use?
There are more ways that insurers can save money than through shorter claim lifecycles, of course. Another potential route to better margins is a reduction in the cost of recruiting and training new staff members, which can be achieved via simpler, more understandable software. If your new claims solution fails to make this a top priority, you could end up heading in the opposite direction and paying through the roof to upskill your workforce.
Does it make the most of modern technologies?
Another factor that might affect the success of your new claims solution is whether or not your software stack is versatile enough to meet the demands of the modern workforce. If your employees are geographically distributed and use multiple devices with different operating systems, then a web-based application hosted in the cloud will probably be a superior option to a Windows-only software environment.
Can you bring new products to market quickly?
Finally, insurance firms today need to be able to bring new products to market much more quickly than ever before. Customers want choice, so if they can’t get a particular service from one provider, they’ll happily move their business to another. A persistent problem with outdated legacy systems is that they’re not flexible or scalable enough to support this speed to market, so it’s critical that new solutions do a better job.« Back to News and Opinion