The advent of insurtech start-ups and the rapid transformation of technology landscape have pushed leading insurance providers to adopt new age technological solutions and chart on the path of legacy transformation. Insurtech leaders have long adopted cloud solutions as a primary mover of their business strategy - to improve their resource-intensive calculations, for scaling up their operations, for driving down costs incurred upon maintenance of legacy infrastructure and services, to be more flexible and to ensure a robust business continuity.
However, a very small proportion of the overall insurance industry has adopted cloud solutions holistically as an organization-wide approach. A recent report by Gartner states that - “Insurance companies are increasing their investment in cloud, but for most it remains a confusing mix of infrastructure & application deployment options”
Gartner defines legacy infrastructure or system as a set of information system that are based upon outdated technologies - yet are critical for a businesses' day-to-day operations.
This clearly indicates the intent to transform the legacy systems however the perception about complexity involved in the transformation often makes such strategies take a back seat.
Let’s first understand the issues with legacy systems & how its transformation can lead to better business outcomes.
Issues with Legacy Systems - Barrier to Digital Transformation & Superior CX
Outdated: Legacy systems are often outdated owing to the absence of new updates, support and maintenance features. Most of them are at a stage where their manufacturers or suppliers have either stopped updating any more support or maintenance release or are dependent on third party vendors for support functions.
Integration and Migration: With huge loads of data and documentation, these systems create daunting challenges during migration or integration to a new platform.
Cybersecurity: These outdated legacy systems are prone to cyber-attacks and are easy prey or prime target for cybercriminals owing to their legacy coding patterns that are easier to break through. They are often not updated with the latest security patches and are left prone to cyber-attacks.
Hindrance to better CX: Legacy systems were not designed to meet the demands and expectations of modern customers- the need for personalized products and services, abundance of data, its analysis for curated content delivery and the need for omnichannel presence and cross-device delivery. By sticking to legacy hardware and not investing in new technologies will be no more sustainable, even for leaders in the business
How Is Cloud Helping Insurers Deliver New-Age Solutions With Speed And Optimum Cost?
There are several key factors that are pushing insurers to usher in their legacy transformation to cloud as they reassess their business strategy. The prime drivers to this transformation include the need to deploy and deliver fast, the need for increased security, the need to cut rising cost, to meet the ever rising customer expectations, the need to be flexible and to be available round the clock.
1. Faster Deployment- Boosting Efficiency:
Cloud's ability to be deployed in a very short time can help insurers ensure that their operational workflow does not hamper during the transition. Cloud has ample resources at its disposal to allow multiple users to access the resources in the shared environment. Insurer can thus be assured of higher productivity and boosted efficiency.
2. Centralized Platform for Stakeholders:
With cloud services, insurers can seamlessly offer their various stakeholders, including the customers, agents and brokers, a unified and centralized platform. Such unified platform helps not just in creating seamless customer experience but also creates greater collaboration and productivity for employees.
3. Faster Time to Market:
Cloud services help in provisioning software development platforms that supports creation of new solutions and tools for insurers in no time and in a very fluid, seamless and frictionless manner. Insurers can thus design, build and deploy customer-centric solutions in no time leading to a faster time to market . Insurers with cloud transition stand on a solid foundation to outdo their competition.
4. Cost Effective:
Transition to cloud computing drastically reduced the capital expenditure associated with purchase, maintenance and support of systems and costly servers. Cloud services are charged to the users based on pay per use and user license purchase model. Thus, scaling up or scaling down the business would mean increase or decrease of these user licenses- giving greater flexibility to the insurers.
Legacy transformation is thus important industry wide, and more so for insurance, owing to their over dependence on systems and data whose crash and failure can turn out to be fatally dangerous. Legacy systems also pose serious challenge to update, compatibility and integration with the newer systems, applications and devices, owing either to their lack of configuration or support.
The need for insurance industry to move towards digital transformation and ensure the delivery of effortless and seamless CX demands the adoption of modern technologies and a transition towards cloud.
Espire Infolabs offers a comprehensive suite of cloud services focusing on seamless collaboration across your business functions - creating an agile, flexible, and a customer centric environment. Espire with its strategic partnerships ensures delivery of best in class cloud solutions, ensuring smooth transition of your critical data delivering both scalability and reliability. You can reach out to us at firstname.lastname@example.org for any query and do subscribe to our blogs for latest trends and insights.
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