Some Insurers Need an Extreme Makeover
Robert Regis Hyle | December 02, 2014
Now that we’ve all been thankful for what we have, it’s time to focus on what we don’t have and for many insurance carriers that is modern core systems. As we look ahead to what we hope will be a fruitful year in 2015, it is important to understand that many carriers will not be advancing at the pace of market leaders because their legacy systems simply won’t allow it.
In the December issue of ITA Pro magazine, we take a look at what insurers and analysts hope to find in 2015 and beyond, but as our columnist George Grieve reminds us, all the wonders of technology that are unfolding before our eyes remain off limits to those saddled with old technology.
“For many carriers, it’s still yesterday,” writes Grieve. “The only way to escape yesterday is to make a major investment in time and money to fix the boiler room of the core systems environment.”
Fortunately, many carriers have followed this path and a good many are currently in some form of an update, whether it is in the talking stage or in the midst of an implementation. It is easy to understand why the rest of the industry is hesitant.
What they have been doing for years has worked successfully and the systems in place, with the exception of maintenance, are already paid for. Who wants to invest millions in a new system to replace something that isn’t broken?
What is hard for many IT leaders to communicate with their executive leadership is that these systems really are broken because they cannot perform the way today’s customers want them to perform. Many customers—and not all of them are Gen Y—want to do business electronically and in a mobile fashion. They want to use their iPad or their smartphone because those devices allow them to do everything they want to do, with the exception of doing business with their insurance carrier.
Asking customers to remain patient and to stay with their carrier is not going to work much longer. Workarounds and other attempts to thwart modern technology just won’t fly with customers who have become used to modern ways of doing business.
Grieve sums things up quite well with the old line about putting lipstick on a pig: “Technology innovation without core system modernization is putting lipstick, Botox, and plastic surgery on the pig.”
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The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
ITA is pleased to present the 2014 Webinar Series. We have many topics for you to choose from and attendance is open to all ITA members. The webinar topics are current and exciting — ranging from predictive analytics to telematics and will focus on the direction insurance carriers need to follow for the future. All webinars are presented by insurance IT professionals along with some of the leading analysts and consultants in the field. There is no cost to attend an ITA webinar. For more information and to register for the webinar, click the “title” of the webinar below.
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