The digital evolution and the push toward core system modernization is here, and the insurance industry is jumping in.
Insurers now expect a new core system to be up for replacement within 10 years, and some anticipate an even shorter lifespan. That shrinking window is forcing carriers to rethink how they allocate resources, with many now focused on getting more value from their core systems rather than replacing them outright.
Insurers are also facing an accelerated pace of change and exponential advances in technology, pushing the industry to look ahead at shifting business models and products. Many are increasingly unsure if an aging insurance core system can face the challenges brought by digital and insurtech advances, making it one of the more pressing challenges for the insurance industry. At a minimum, today’s core insurance software must keep improving in upgradability to match the pace of market change and capabilities insurers need now.
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 and legacy system replacement. It’s one of the clearer insurance technology trends to watch, and it’s not slowing down.
Insurtechs are not limited by the legacy issues many insurance 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 accelerates the time to market and drives new pricing models into the industry.
The insurers who come out ahead will be the ones who know how to turn change into competitive advantage. That means leaning on new technology and data, designing services rather than just products, and driving digital transformation for insurers through collaborative initiatives and ecosystems.
Diamond, Insuresoft’s unified core insurance platform, is built exactly for this kind of modernization. It gives carriers a single configurable core across insurance policy administration, billing, claims, and data, without the disruption of a full system overhaul.
Ready to explore what core system modernization looks like for your business? You got it.