Chief Technology Officer
How should insurers with highly customized legacy systems go about a digital upgrade? What benefits can they expect?
A ‘digital upgrade’ consists of two activities that need to happen in tandem - one is customer acquisition through digital means, and the second, and more important, is engagement with the customer through digital means. The second is more important to get right, because if one acquires a customer through a high-quality digital process, the customer will have the same expectation from the insurer for interactions going forward. And there is nothing worse for retention than unmet expectations. The ‘how’ to get there essentially depends on the ability to create a comprehensive and timely view of the customer from the legacy systems. This can be done either by replacing the core systems themselves, or by a combination of retooling and a CRM system with some serious insurance chops. The benefits that accrue can broadly be classified under better retention, lower operating costs and lower customer acquisition costs.
Why does integrating an insurer’s underwriting, claims and policy admin systems lead to greater efficiencies and better customer service?
Quite simply because getting the information one needs for a transaction or decision becomes much more accurate, easier and cheaper. By contrast, if you’re relying on downstream integration, for instance via a warehouse or ODS, it is much more painful (and expensive) to have all the information that you need where and when you need it. For instance, if an underwriter is reviewing a new policy application, it is useful for her to know that the individual’s EFT payment method was recently rejected, and has a claim that got referred to the SIU. Close integration also enables one to make customer interactions more fruitful - reminding a customer that called or e-mailed about a bill that he also owes the insurer an electrical update certificate makes the customer interaction with the insurer one between two individuals, not between an individual and an entity where the left hand does not know what the right hand is doing.