Embracing modern technology systems comes with a lot of benefits to insurers like better efficiencies, cost savings, and productivity. But, successful digital transformation hinges on the ability to integrate insurtech innovations with the legacy systems that many insurers still rely on for day-to-day operations.
Even though insurtech startups continue to offer new and innovative digital solutions, insurers need to understand the challenges and opportunities associated with integrating both new and old technologies, which we will touch on in more detail below. Continue reading on as we provide some insights into effective integration strategies and best practices, as well as the potential benefits of successful integration.
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Understanding the Challenges of Integration
Linking new and old systems together doesn’t come without challenges. For starters, there are a number of technical considerations that will need to be addressed throughout the process of integration, like whether or not the two systems are compatible, how data management will work between the two, and what cybersecurity risks are associated with the integration. Most of these roadblocks are due to the fact that older and newer programs may not be able to facilitate seamless data sharing between them, which could hinder successful integration.
Some of the other hurdles of integration lie on the organizational culture side. How can you promote buy-in from your seasoned employees who have utilized a certain program for years or maybe even decades? Insurers may experience some friction or resistance as they attempt to introduce new programs and get employees caught up to speed. All in all, insurers will need to identify and work through these concerns as they approach integration to avoid any disruptions in operations and ensure a smooth transition.
Best Practices for Integrating Insurtech and Legacy Systems
Despite the challenges, there are a number of effective integration strategies and best practices that insurers can employ. One such strategy is to use application programming interfaces (APIs) to enable seamless communication between insurtech solutions and legacy programs and make them more compatible with one another.
Another key area of focus is data integration. Data is the heartbeat of insurance operations, so ensuring that the data quality remains strong will allow the data to be seamlessly communicated across platforms. Otherwise, corrupted or dirty data can lead to unreliable and inaccurate results for insurers.
Lastly, it’s important to ensure employees feel included in the integration, which can help them be more open to such a big change. Effective change management at all levels within the organization will lead employees to embrace the new technology if they can see how it will enhance their job experience. This means maintaining open lines of communication with employees to ensure their questions are answered and that they see the value of the integration.
Maximizing the Benefits of Insurtech Integration
There are countless benefits that insurers can take advantage of from the successful integration of insurtech solutions with legacy systems. For starters, this integration has the potential to make insurers much more efficient. Legacy programs are often outdated and slow, while insuretech solutions use the latest technology to promote efficiency and accuracy in insurance operations.
These benefits will also be felt by policyholders. Insurtechs allow for more personalization of services, faster claims processing, and more direct customer support, all of which can improve their loyalty and overall experience. In turn, insurers can build up their competitiveness and grow their market share.
Plus, the potential cost savings of migrating away from legacy systems is immense. According to some estimates, banks and insurers spend about 75% of their IT budgets on the maintenance of their legacy systems. Integrating these outdated systems with more efficient insurtech programs will help insurers better deploy their resources and be able to redirect these savings to more strategic areas of the business that promote growth.
The long-term value of integration will support insurers’ growth potential as the modern insurance market evolves. With more modernized operations, they are better able to meet changing market demands and trends, beating out competitors who are lagging behind on digital transformation efforts.
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Successful integration using the above strategies and best practices will allow insurers to migrate operations to more advanced insurtech programs without disrupting business or losing stakeholder support in the process. In turn, they’ll be able to benefit from the better competitive advantage, cost savings, and efficiency boost that innovative insurtech programs provide.
Insurers shouldn’t shy away from change and innovation. Those that embrace and adapt through insurtech solutions will be able to leverage advanced technologies that improve their operations and allow them to provide a better policyholder experience.
To stay ahead of the competition with cutting-edge technology, insurers can turn to Insuresoft. We help your operations run smoothly behind the scenes while you focus on the core processes that set you apart from the competition. We are proud of our 100% success rate with client implementation, so you can feel confident in our ability to streamline your operations and help you scale without any interruptions to your regular operations.
Contact us today to see how a modern insurtech solution can give you a competitive edge.
