Digitization poses major challenges for insurance companies. Technological advances not only lead to a reorientation of internal processes, they also create entirely new methods of customer communication. In addition, they facilitate the development of a new generation of innovative insurance products. This not only applies to insurers who service private customers – digital technologies are also revolutionising the systems used in commercial and industrial insurance. In order to cope with these challenges, many insurers now rely on new IT structures in areas such as policy administration.
Goals and applications for new technologies
Many insurance companies are busy replacing or expanding their policy portfolio management systems. The general aim here is to adapt their IT infrastructure to meet the needs of a digital marketplace. For the most part, the goals are much the same: businesses want to reduce the time it takes for a product to reach the market, furthermore, they want to improve their analytical methodology and customer service, and finally, they hope to increase efficiency while also reducing technological risks.
Software as a Service: cloud applications
Software as a Service (SaaS) means that an IT company acts as a service provider, supplying software solutions an insurer requires. This type of service is then accessed via the cloud. The benefit for insurance companies is that they no longer have to worry about the provision of hardware and software. Access is very simple via the Internet, and makes it possible to react very flexibly to changing requirements. A large proportion of insurance companies already use a cloud-based policy management system to service all new contracts. Moreover, some insurers now use this method to manage their entire system, and to store records of all existing policies.
Microservices: flexible software architecture
Microservices is another very useful strategy to employ. Instead of one monolithic program that performs all functions, this software development technique uses many independent building blocks, which can interact via efficient interfaces. This form of software architecture makes it much easier to react quickly and flexibly to changing requirements. The system can also be used to optimise user experience. Microservices allow the use of different channels, so each customer is free to select and access only the offers that best meet his needs. Furthermore, this approach lends itself well to the task of designing custom insurance products.
Sharing the marketplace with Insurtech companies
In recent years, we have seen the emergence of many Insurtech companies offering a completely new approach to insurance. These new participants in the insurance industry have introduced some innovative ideas to the agenda, many of which should also be of interest to every insurer. The strong focus on improving individual user experiences is one particular aspect that is of great importance. Many insurance companies are already preparing their IT infrastructure to accommodate and implement newly developed technologies. This will leave them well placed to take advantage of the new market opportunities created by the advent of Insurtech companies.
A new approach to IT implementation
Last but not least, there has been a move towards a new approach to IT implementation in the insurance field. The traditional method was to implement new software for just two or three different business lines. Changes and additions were then effected by introducing new versions of the software. It is now common practice to introduce a broad range of services for different areas and to add further detail at a later stage. This revised procedure considerably speeds up the IT implementation requirements.
This article was originally published on LinkedIn.