Focusing on value creation is crucial for insurers, and choosing the right insurtech partner is a big part of this. In his InsurTech World article, Mike Daly, director at Altus, explores how insurers can focus on value creation and choose the right insuretech partner.
Here are our three big takeaways from the piece. Don’t forget to check out the full article here:
1. Insurers are still digitising
The article discusses a few key points from McKinsey’s “Creating value, finding focus: Global Insurance Report 2022” and the Altus DigitalBar:
- Core system replacement is still on the agenda. Operating costs are rising, and legacy systems are now starting to crack under pressure.
- Digital maturity in insurance remains low, but the next wave of coretech providers have more advanced digital capabilities.
This really should be the last big technology transformation insurers undergo. After this, their ecosystems need to evolve, and to do this, they’ll need the right foundations.
2. Insurance ecosystems can now be formed
Data has always been essential to insurers, but it’s even more important as behaviour- and usage-based insurance starts to increasingly shape new products, risk management services are created and the relationship with customers and their experiences drive the competition for loyalty in still price sensitive markets.
Insurers now need to create data fluid, intelligent and open market integrated platforms. Mike explores this in his article, addressing the “new legacy” dilemma born out of current approaches. In equal measure, insurers need to see coretech as an enabler, with a much broader data ecosystem that can be built around it. Coretech addresses some of the ambitions around claims, but also drives innovation and speed-to-market for new products, services and experiences.
3. Insurance transformation is hard, but it could get easier
Insurers are up against both enterprise design challenges and technology-driven challenges. And they still need to focus on a “coming together” across their organisation to get true transformation going. In his article, Mike usefully references a Gartner illustration on choosing technology partners. One of the issues insurers face within this is a procurement challenge.
According to Mike, this means a “death to the RFP.” As he says, RFPs are designed for enterprises that know exactly what they want to replace, have spent months detailing the functionality they want and require detailed due diligence on security and performance.
As Mike points out, coretech technology is built for the future of insurance, not the past, so buyers won’t think that a 2,000-line RFI with very detailed functionality on the way that they used to run business will work for them in the future. As he says, “Most of those people building those question sets at the carrier have known only one or two ways of doing things. They then also lock down conversations and communications as they ‘negotiate.’”
At EIS, we absolutely look for partnerships, long-term relationships where we can invest our time, effort and energy supporting ambitious clients wanting to build their ecosystem. It’s an absolute pleasure for us when we can play a part in making that happen.
Want to learn more? Book a call.