Insurance companies face a pressing need to modernize their core technology systems in order to keep up with evolving customer needs and stay competitive in the marketplace. Aspire Systems, in a collaboration with renowned analyst firm Everest Group, has published Making the Right Bets on Core Modernization in Insurance, an article that provides insurers with a roadmap for maximizing the value of their core systems, which is critical for achieving both growth and efficiency goals.
Step 1 – Shaking it up from the roots
The first step in this agenda is for insurers to shift from making peripheral changes to driving core modernization as a foundational lever for insurance digital transformation. By investing in core transformation, insurers can build internal systems that work together seamlessly and eliminate any silos that pose challenges in communication. This helps to drive efficiencies in internal functions and enables insurers to build customized risk solutions, thereby improving the customer experience. For example, a modern core technology estate can allow insurers to build personalized products and experiences for small customer cohorts, which is key to garnering mind and wallet share in a crowded marketplace.
Step 2 – Friend’s friend is your friend too
The second step is for insurers to leverage complementary capabilities and the extended solution partner ecosystem. Despite undertaking large-scale insurance digital transformation initiatives, many insurers report value leakages from their investments in core technology. While core systems streamline internal systems and provide agility, insurers can realize value-generation opportunities from working with InsurTechs, and core technology provider-affiliated solution partners, that offer complementary offerings on top of core technologies. For example, InsurTechs can augment the speed and accuracy of pricing using AI-/ML-based models, while software services providers offer data-backed fraud detection capabilities to reduce fraud across customer touchpoints, ranging from quotes to claims processing. By working with these partners, insurers can gain access to cutting-edge technology and innovative insurance technology solutions that help them stay ahead of the curve.
Step 3 – Exploit every last bit OOTB
The third and final step is for insurers to maximize value from out-of-the-box features/functionalities coverage. Many core product/technology providers are now offering off-the-shelf blueprints for different insurance business lines, which can help minimize the need for resource-intensive customization efforts. These blueprints offer a lucrative opportunity to insurers with limited talent and resource capabilities, even out the technology playing field, and allow insurers to challenge larger peers through comparable customer experiences.
To fully realize the benefits of core modernization, insurers need to evaluate the long-term benefits and make informed decisions about which core platform to select and which integration partner to choose. Selecting the right core platform is critical for ensuring that the technology is aligned with business needs and goals, while choosing the best-fit integration partner is key for ensuring that the implementation process is seamless and efficient.
Overall, the three-pronged agenda outlined in the article offers a clear roadmap for insurers looking to maximize the value of their core systems. By investing in core modernization, leveraging complementary capabilities and the extended solution partner ecosystem, and maximizing value from out-of-the-box features/functionalities coverage, insurers can stay ahead of the curve and deliver the best possible customer experience. With the right core platform and integration partner in place, insurers can achieve their growth and efficiency goals while also building a foundation for future success.
Aspire Systems has a rich experience of working with leading insurance firms and emerging insurtech companies, helping them gain a competitive edge. We are experts in end-to-end insurance digital transformation and an experienced Guidewire implementation partner. Check out our Guidewire offerings here.