The digital evolution is here, and the insurance industry is jumping in. Insurers expect that a new core system implemented today will be up for replacement in less than 10 years and some insurers anticipate an even shorter lifespan. Shorter lifespans mean insurers are rethinking how they allocate resources for core systems modernization. This is driving many insurers to focus on how they can expand beyond their core systems to get the most from their systems.
Insurers are also facing an accelerated pace of change and exponential advances in technology. This is forcing the industry to look to the future — at the changing business models and products in the market. Many insurers are unsure if an older core system will be able to face the challenges brought by digital and insurtech advances. At a minimum, the core systems of today must continue to improve in upgradability to keep up with the advancing capabilities insurers need to match the pace of market changes.
Many insurers are focusing on rapid product development by backing insurtechs offering new, more relevant coverages, capabilities, and platforms, unburdened by the usual policy categories or annual commitments. The whole insurtech movement is fundamentally altering the rules of the game and spurring the creation of a new ecosystem driving innovation.
Insurtechs are not limited by the legacy issues many core systems providers are facing today and as a result, they are demonstrating the art of the possible. But many insurtechs lack a strong brand, experience, and capital which could be provided by already established players in the marketplace.
There is a tremendous amount of value in bringing together like-minded technology and service providers to deliver new solutions to the industry. This type of collaboration is accelerating the time to market and driving new pricing models into the industry.
The insurers of the future will be those insurers who understand how to change and create competitive advantage in this new world. These insurers will take advantage of new technology and data sets, design services and solutions rather than products, and transform operating platforms through collaborative initiatives and ecosystems.
There are collaborative platforms, like Insuresoft’s, that enable insurers to extend core systems and innovate across their organization with a unified core, cloud, digital, and data solutions digital platform. To learn how Insuresoft can help you, visit our website or contact us.