As insurers look to form sustainable and scalable ecosystems, they’ll need to expose their products, rules, and rates to other systems of engagement. But are incumbent systems up to the challenge?
The whole idea of an insurance ecosystem sounds great! Just imagine a friction-free marketplace. Happy shoppers feel valued and are automatically offered customized products and services that anticipate their needs and desires. And that delivering those products and services is fast and simple—elegant and economical, even.
In the abstract, it’s all peace, love, and easy data integrations. But when they sit down to really think about it, the whole idea of an ecosystem makes many vendors uncomfortable.
In trying to avoid the cost and risk of years-long implementations and fragile integrations, many vendors engineered integrated “monolithic” core systems. Under the insurance ecosystem business model, however, vendors will need to open up and “play nice” with competitors and insurtechs.
That means they’ll need to redouble their efforts to create open APIs so they can expose all of their products, rules, and rates to any system of engagement. For many, it will mean “re-platforming.” It also means “the lock” vendors imagined on subsequent core systems and “expanding their footprint” evaporates. It means the playing field is shifting again.
Core systems: Incumbent and Encumbered
Insurers have a lot to consider when it comes to their tech providers. With their old-school architectures, the incumbents increasingly are viewed as the “encumbered.” Think about it: to deliver digital insurance ecosystems and contemporary customer experiences, many insurers face a core-systems-upgrade path so onerous that wholesale replacement seems preferable. That’s even more true 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.
When it comes to insurtechs, the promise was that they would support innovation through cloud integrations, contemporary customer experiences, and emerging business models. The truth is that insurtechs are just one part of diverse insurance ecosystems. They require something more than legacy core systems to achieve their potential. They need openness and flexibility. They need coretech.
The Coretech Paradigm Explained
A digital ecosystem starts with a highly-capable digitally-enabled insurance platform as its hub. And ideally, it’s one designed in the coretech paradigm.
Coretech is a new category of insurance technology. It’s the logical combination of next-generation technologies, methodologies, and insurance core systems that easily consumes insurtechs and data in all their forms and, due to its openness, easily joins digital insurance ecosystems to offer excellent customer experiences.
Coretech also offers the deep insurance functionality and enterprise scalability you’d expect from a core systems provider, but it’s architected with the microservices, APIs, and event-based workflows necessary to support ecosystems and other emerging business models. And, because coretech is cloud-native, it leverages the on-demand, scalable and secure infrastructure of cloud, as well as Agile approaches and DevOps methodologies, for the rapid and continuous delivery of new business capabilities.
Insurers need a single source of truth for products, rules, and rates that’s open and supports speed to innovation. In other words, the ecosystem needs a coretech hub, or they’ll never be able to form sustainable, scalable ecosystems. The future of insurance is customer-centric, cloud-native, and most of all: it’s open. It’s coretech. And now you can get it from EIS Group.
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.