Life insurers unsure they can integrate digital
Legacy system integration is the biggest barrier life insurance companies face in trying to adopt digital technologies.
That's according to Unqork, an insurtech providing an AI platform for insurance customer onboarding founded by Gary Hoberman, which surveyed 100 attendees of the LIMRA 2018 conference in late October. Nearly half of those senior executives viewed legacy integration as their greatest technology pain point, with speed to market (21%) and misalignment between business requirements and IT delivery (20%), following.
However, life insurance companies are all-in on digitalization in customer service, the survey found: Reducing paper in onboarding and claims was cited by 60% as a "key innovation that will drive their business going forward), ahead of big data (44%) AI (40%), RPA (25%) and blockchain (6%). Onboarding is the overwhelming consensus as to the closest immediate impact of digital tech on the sector, with two-thirds choosing it over product development, claims and risk management.
Hoberman, the former CIO of MetLife, says that though this survey focused on life insurance, his new company sees some similar trends across lines.
"Even though P&C has the advantage of renewals which allow for easier migrations, it is easy to look around and see multi-year, multi-million dollar transformation projects facing the exact same challenges," he says. "In Specialty/Commercial insurance, we are tackling the most difficult challenges from broker intake to loss runs, where paper and email prevail as dominant channels.
"Insurers perceive legacy systems as a hurdle to growth and despite the disruptive power of innovations such as AI and blockchain, they are far away from leveraging their potential,” he adds. “However, pointing to legacy technologies as a barrier is a myth, based mostly on the fear of accepting sunk costs. Insurers can still progress by refocusing on their competitive advantage – whether that is product design, underwriting, risk management or claims servicing – and grow their business.”