Insurtech’s promise was that it would support innovation through contemporary customer experiences and emerging business models. The truth is that insurtechs are just one part of diverse insurance ecosystems and require something more than legacy core systems to achieve their potential. They need “coretech.” And in 2020, they can get it.
There’s one ugly truth behind most every digital insurance transformation project: the customer experience sucks.
Armed with personal technology and near-ubiquitous connectivity, customers are continuously exposed to highly personalized and data-driven customer experiences. The companies they like to do business with “know them.” They know their location, their purchase histories, their communications preferences, and they offer almost-empathetic customer experiences; customer experiences that insurers are only just beginning to consider, much less deliver.
Sensing the opportunity to improve frustrating and repetitive tasks and transactions, insurtechs have flooded the insurance technology market. They’ve pushed innovation in wearables and telematics, as well as AI-driven solutions, like chatbots, virtual assistants, object recognition, and voice biometrics, attempting to create frictionless customer experiences and new more customer-centric business models. But nothing’s that easy.
Difficult Encounter: Insurtech meets Core Systems
The encounter between insurers and insurtechs has been strained, starting with the friction between “fast company” start-up culture and the slower, more risk-averse insurance culture.
Insurtechs encounter cumbersome vendor onboarding and procurement processes. Despite their best intentions and high aspirations, it takes an average of 12 months to get these initiatives into production, according to analyst firm Novarica. Even then, traditional hierarchies and incentives can prevent innovation from taking root.
Insurers find that insurtechs typically are not built to support very high premium volumes. And that their insurtech partners often lack experience with insurance processes, systems, and integrations. From there, the challenges only increase.
The core systems deployed even three years ago simply were not designed with the microservices, APIs, and flexibility necessary to support insurtechs, emerging business models, and digital insurance ecosystems. They are, in effect, modern-legacy systems. That some of these modern-legacy systems now operate in the cloud is great. But it doesn’t change the fact that many need to be updated, or even re-architected, to easily join digital insurance ecosystems.
That’s unsettling for many insurers, and it should be. The result is that, to deliver contemporary digital customer experiences and ecosystems, many insurers face an upgrade path so onerous that wholesale replacement of their core systems seems preferable, especially given that customer-experience needs and expectations continue to evolve. This is a trend we’re exploring separately in our eBook, The Greenfield Field Guide for Insurers. Be sure to check it out.
Why Insurtech Needs Coretech
In the digital insurance ecosystem, everything — from solutions and capabilities to services and product offerings — is interconnected to support the customer experience.
Insurtechs rely on insurance core systems’ scalability and deep insurance functionality. But when those core systems can’t match their openness and flexibility, it weakens the ecosystem. That means insurers, too, need something different, something better, than modern legacy systems. Even the “insurtech insurers” that have built their own digital insurance platforms have stumbled when pressed to scale up, and many have struggled when faced with the necessity to re-create the functionality found in modern legacy systems.
And that’s why insurers need coretech.
The EIS Group Coretech Manifesto
Coretech is a new category of insurance technology platform. It’s the logical combination of next-generation technologies, methodologies and insurance core systems that easily consumes insurtech and data, in all their forms, and easily joins digital insurance ecosystems to offer excellent customer experiences.
In its design and delivery, coretech is different from monolithic and modern legacy core systems. Coretech is an ecosystem-enabling platform. It’s architected with the microservices, APIs, and event-based workflows necessary to support easy integration with insurtechs and third-party data and services providers to support emerging business models. And, because coretech is cloud-native, it leverages the cloud’s on-demand, scalable and secure infrastructure, along with Agile approaches, and DevOps methodologies, for the rapid and continuous delivery of new business capabilities.
Coretech mirrors the next-gen architecture of insurtech, and it’s fully open to the digital ecosystem to ease integrations and operate in real-time. It also offers the deep functionality and enterprise scalability borne of its origins in the insurance enterprise.
The customer has to be at the center of coretech. At EIS Group, our coretech manifesto is to provide unified transaction processing, an intelligent CRM with a full 360-degree customer record and engagement history, with persona-based customer experience tools, and the capabilities to engage customers, how and when they want, within the ecosystems they spend time in.
And that’s how to deliver a customer experience that doesn’t suck.
Download the eBook now! “When insurtech meets coretech, the customer wins!” to learn how the insurers of the future are joining digital ecosystems and delivering the experiences customer now demand.