Legacy Retirement Long Overdue
| date: May 1st, 2018
As disruptive and daunting a decision to retire a legacy system can be, it is the only way that insurers can better position themselves to unlock the full potential of emerging technologies.
Global insurance market leaders are leveraging cutting-edge technologies and witnessing dramatic improvement in both their top-line and bottom-line results. This trend-setters, who invested early in digital transformation, are now shifting to transformative technologies like cloud computing, the internet of Things (IoT), big data, artificial intelligence and block chain to power their next phase of growth.
In my previous article, Change: Insurance Digital Imperative we saw how insurers everywhere are grappling with various challenges key of which are growing market share and revenues while at the same time reducing their operational costs. And as the insurance landscape shifts with changes in demographics, technology and customer demands and expectations insurers are realizing the need to rethink the way they do business and relate with their internal and external customers.
Insurer Still Running Complex Legacy System
Unfortunately a majority of African insurers are yet to adopt to these new ways of conducting business that can revolutionize their organizations. Many are still running complex legacy systems which are cumbersome and lack the agility required to keep up with evolving market conditions.
Characterized by significant operational and maintenance costs, this old systems, are difficult to modify, require a legacy skill set scarce in the market and most are beyond their vendor-supported lifetime. These challenges are compounded by the increasingly stringent industry compliance demands which this old systems cannot adequately meet.
Legacy System Retirement
The way forward is clear, as laggards in the race for legacy replacement, this insurers urgently need to retire legacy technologies to pave way for modern solutions that will enable greater value delivery to customers.
Modern technology systems optimize manual business processes leading to a significant reduction in costs – i.e. labor and maintenance. Streamlining of processes also makes it easier for insurers to aggregate data from various departments, eliminating silos and encouraging interdepartmental collaborations.
Core business insurance software facilitates the execution of multiple functions including quotations, underwriting, policy management, claims management, billing, new product development and customer service. Embedded data and process flows and automation enable the provision of fast and reliable services for enhanced insurance customer experiences.
Agility to Respond to Market Volatility
Insurers gain agility to quickly respond to rising market needs with new products and services. The benefits include improved compliance as modern systems help eliminate inefficiencies and facilitate legal and regulatory compliance. In addition, fraud, a major concern within the industry can also be mitigated through modern technology as the ability to integrate with and utilize advanced technologies to support analytics and real-time transactions are enabled.
As disruptive and daunting a decision to retire a legacy system can be, it is the only way that insurers can better position themselves to unlock the full potential of emerging technologies and face the current margin pressures and ongoing industry changes.
Besides doesn’t it make sound business sense to retire an asset whose support and maintenance costs far outweigh its business value?