The whole idea would have been ludicrous even three years ago. Now, seemingly out of nowhere, new and credible insurance brands are popping up with slick user experiences, instantaneous quotes, five-minute buy cycles, and DIY service options—all available on your phone—24 x 7 x 365. And what makes all this possible? Rapidly maturing cloud-native architecture, digitization, open APIs, and the mainstreaming of the greenfield initiative as a favored strategy are enablers.
Whether it’s for product development, customer experience, or a digital transformation project, the single most urgent driver is the need for speed. And yet, the industry is awash in stories about core-systems replacements dragging on for years, with cost overruns in the millions or even 10s of millions of dollars. But you can’t fault those teams for their ambition. After all, these are make-or-break career-defining projects and, in truth, few people have actually done one before. They also didn’t have many other options.
Until recently, core systems were monolithic, expensive, and took ages and armies to implement. With the advent of core systems based on open, cloud-native architecture, that’s no longer the case. Their subscription-based pricing, pre-integration, and low-code/no-code configurability make it feasible to start small, learn, and launch quickly. It’s practically a trend, according to Celent*.
Greenfield initiatives operate as a separate entity from the mothership. Unhindered by legacy, they innovate quickly and freely. They combine what is possible in a new build with the capital resources and savvy associated with an established firm.
You can learn more in The Greenfield Field Guide for Insurers, but here are four reasons now is the time to begin your greenfield initiative:
- Time-to-market and build costs have decreased dramatically, thanks to advances in cloud-based services, openness, continuous integration and continuous development (CI/CD).
- Focusing on a single LOB, with no tech debt, makes it possible to reimagine and create business processes that are natively digital, automated, faster, and have significantly lower run costs.
- Insurers pursuing disruptive innovation with new business models and data-driven underwriting are already winning over customers.
- The ability to collect, analyze, and combine data in new ways enables you to test, learn, and rapidly deliver new value-added products and services. Do that often enough, and it becomes a meaningful competitive advantage in an increasingly commoditized market.
If you’re not already convinced of the value of digital transformation, I won’t bother trying to change your mind. On the other hand, if you’re looking to get one done in this lifetime, consider a new strategy: the greenfield initiative. The technology is ready, and the proof is chasing market share.
To learn more about greenfield, download The Greenfield Field Guide for Insurers: Is Greenfield the Right Approach to Your Digital Transformation?
*Insurance Innovation Outlook 2019, Celent, page 12. “The final notable area from the investment expectation data relates to greenfield startup activities. Just over half, 51%, reported that their investment would increase.”