Insurers take on infrastructure changes to go digital
As insurers face pressure to engage customers in the digital world, they must begin by revamping their IT infrastructures. That’s leading to a trend away from the mainframe and towards the cloud, according to a recent survey by Forrester.
The “Digital Is Disrupting Insurance: Transform Your Infrastructure To Win In The Digital World” report, which was commissioned by Ensono, found that 63% of 160 respondents had modernized the platforms and data center environments that they own. A similar amount – 58% – say that came along with using more cloud infrastructure. Overall, 47% said that they had “retired or reduced our dependence on mainframe or midrange systems.”
The major goal of all these initiatives is to provide a better customer experience, the survey indicated. Three in five respondents said that they had taken on front-end applications and moved those to the cloud first.
“Customer onboarding is one of the easiest areas to innovate in as it’s typically right before customer information moves into a system of record,” the survey says.
The next-most common goal is to improve data quality to power predictive analysis and up- or cross-sell opportunities. That shows in a list of deliverables IT departments can provide when it comes to meeting carriers’ major business drivers. The top responses were:
- Improving application performance overall (46%)
- Leveraging cloud platforms for advanced data analytics (46%)
- Improve our overall availability and disaster recovery capabilities (44%)
- Expanding our use of mobile, analytics, IoT, and other emerging cloud-based platforms (41%)
But those changes come with new pressures of their own. Even though customer self-service is expected to drive down some costs for insurers, almost all respondents said that funding digital initiatives was challenging them. When asked what was causing funding pressure, the leading reasons given were:
- We have too many different commercial software licenses (53%)
- Commercial software support costs keep rising (50%)
- We are locked into long-term contracts (45%)
“The same monolithic technology and practices that have kept insurers relatively stable for decades are now holding them back when it comes to digital transformation,” the survey says. “Customer experience and improved business performance is hindered not only by reticence to update business processes, but by an infrastructure underpinning that must be selectively modernized to best take advantage of it.”