Home Insurance 7 Methods Legacy Insurance coverage Know-how Could Be Holding you Again

7 Methods Legacy Insurance coverage Know-how Could Be Holding you Again

7 Methods Legacy Insurance coverage Know-how Could Be Holding you Again

This put up is a part of a collection sponsored by AgentSync.

The Southwest Airways disaster that rounded out 2022 could have been a nightmare for everybody concerned, however there was one constructive that got here out of it. The debacle helped begin a bigger dialog on a subject we’ve been speaking about for fairly a while now: the issue with outdated know-how. As we start the brand new 12 months, we anticipate professionals throughout all industries taking a more in-depth take a look at the cracks of their technological infrastructure and legacy methods.

Legacy know-how and the insurance coverage trade typically go hand in hand

The insurance coverage trade isn’t any stranger to outdated know-how. As a legacy trade, legacy tech is par for the course. It wasn’t till the COVID-19 pandemic started inflicting enterprise shutdowns that many insurers have been mainly compelled to replace their processes and softwares in an effort to proceed working below new security pointers.

In some ways, the COVID-19 pandemic was the catalyst for the insurance coverage trade’s digital revolution. However, numerous carriers and companies are nonetheless counting on the outdated manner of doing issues. Why is that?

The reply isn’t simple. Some could also be nervous about the associated fee whereas others are extra involved with the problem of changing legacy methods. Some are simply afraid the change shall be an excessive amount of for workers and that it’ll trigger extra enterprise disruption than it’s price. Nonetheless, if Southwest’s breakdown taught us something, it’s that no excuse is price risking the harm that outdated know-how may cause to your group, workers, and prospects.

So, with out additional ado, listed below are seven methods your legacy system could also be inflicting your insurance coverage enterprise extra hurt than good.

**We’ll be exploring these issues from an insurance coverage perspective (as that’s our experience), however many of those issues apply to companies in any trade that also depend on outdated know-how.

1. Legacy know-how is cost-heavy

One of many extra frequent roadblocks we hear from insurance coverage specialists who’re nonetheless operating their enterprise on outdated methods is {that a} new answer is simply not within the price range. Whereas it’s true that the upfront prices of including extra fashionable instruments to your tech stack could also be substantial, they’re nothing in comparison with the price of sustaining legacy methods. Selecting to maintain doing issues the best way you’ve at all times accomplished them as a result of it appears simpler (or cheaper) now is called technical debt. And like most money owed, they finally come due.

The older methods get, the extra they price to take care of. Plus, legacy know-how might be consuming away at an organizations’ backside line in different, much less apparent methods. For instance, an outdated company administration system (AMS) or buyer relationship administration system (CRM) may not have the ability to provide the options or ease of use that workers, producers, shoppers, and downstream distribution channel companions are searching for. If these prospects, workers, and companions aren’t happy with their experiences, they might take their enterprise (and their expertise) elsewhere, seeking a extra fashionable expertise.

2. Legacy know-how can hurt your repute

You’re employed arduous to take care of a constructive repute on your insurance coverage enterprise. A poor repute may lead your shoppers straight into the fingers of your opponents and negatively impression your backside line. We noticed first hand how outdated know-how managed to pull Southwest Airways’ repute via the mud in a matter of days.

Relating to insurance coverage, there doesn’t essentially have to be a large breakdown or error along with your legacy system to negatively impression how present and potential prospects and workers view your organization. It may also be the day-in-day-out tedium of outdated know-how that lastly will get to folks. If you happen to proceed utilizing legacy know-how, workers, prospects, and shoppers could view your organization as being behind the occasions. And in case your technological infrastructure appears to be like prefer it’s caught previously you’ll have a more durable time convincing anybody of your future spot available in the market.

3. Legacy know-how may get you in regulatory hassle

A significant downside of legacy know-how is its incapability to combine with newer software program. Insurance coverage professionals want methods that may talk with one another and paint an entire image of their knowledge in an effort to make knowledgeable enterprise selections. The complexity of the insurance coverage trade’s state-by-state regulation system means it’s essential for all methods to be built-in and up to date in actual time to keep away from compliance violations.

Updating to an automatic built-in compliance answer (like AgentSync) can create vital compliance administration price financial savings and guarantee steady producer and company compliance – with out the handbook effort that you just’d want to make sure the identical degree of compliance right this moment.

4. Legacy know-how can inhibit progress at your company, service, or MGA/MGU

Legacy methods are hardly ever scalable. Fashionable issues want fashionable options and legacy know-how is commonly unequipped to handle present wants. Due to this, legacy methods could be a main barrier to a company’s progress and innovation.

The longer an company waits to replace its legacy methods, the more durable will probably be to handle present market wants and achieve new market share. If you happen to’re not able to utterly overhaul your group’s legacy methods, there are different choices that may make it easier to dip your foot within the pool of innovation.

5. Legacy know-how fuels inefficient workflows

Legacy methods can block your group from realizing its full potential. With outdated know-how, it’s doubtless your workers is spending an excessive amount of time on handbook, repetitive, and non-revenue-generating duties. Not solely is that this a waste of expertise, however it additionally will increase the possibility of human error and non-compliance.

With out up to date insurtech, processes like producer onboarding and compliance administration eat up much more time and assets. Bear in mind earlier after we talked about that legacy methods don’t often combine simply with different know-how? This lack of communication can create knowledge and workflow silos that block data from flowing between groups and in the end decelerate processes.

6. Legacy know-how may make you extra susceptible to cyber assaults

Hackers are continually discovering new methods to sneak previous a company’s cyber safety measures and entry its safe knowledge. As software program ages, it could not have the defenses wanted to guard in opposition to newer cyber threats. Cyber safety is an enormous concern for insurance coverage companies and carriers which frequently retailer huge quantities of delicate consumer data. Outdated software program may make that knowledge extra susceptible to an information breach, bringing you proper again to earlier factors about reputational hurt and arduous greenback prices.

7. Legacy know-how may negatively impression hiring efforts

We’ve mentioned it earlier than and we’ll say it once more – the insurance coverage trade is within the midst of a hiring disaster. Mass retirement and a shrinking expertise pool means high-quality candidates have extra energy to decide on the place they’d prefer to work. And in the event you suppose the possibility to work with software program that predates their grandmother is an efficient promoting level then oh boy do we have now information for you.

At this time’s job-seekers are searching for fashionable corporations which can be utilizing the newest know-how to enhance each the shopper and worker expertise. Providing producers a high-tech expertise with much less time spent on handbook, repetitive, time-consuming duties may assist as you proceed to compete for expertise.

The time to modernize your insurtech is now!

One of the best by date in your insurtech has come and gone and it’s time to rethink the “if it ain’t broke, don’t repair it” mindset you’ll have beforehand held relating to your legacy methods. In actuality, it’s a lot better to repair the issue earlier than a serious malfunction (once more, you simply have to take a look at Southwest Airways for proof). Clearly, outdated know-how can do much more hurt than good in the case of your company, service, or MGA.

Don’t be like Southwest and wait till the harm is already accomplished. The time has come to throw out your legacy methods together with the issues they’re inflicting your insurance coverage enterprise. If you happen to’re able to declare your independence from outdated tech and processes see how AgentSync can assist you attain your full potential.