In recently viewing the results of INN's survey of 421 insurance executives, sponsored by Oracle Insurance, there were some surprises. Namely, that a lot of carriers seem to be spending a lot of time and mindshare dealing with their legacy systems, versus spending time on new technology initiatives and innovative products that could help advance the business.
I have heard cross-industry statistics claiming up to three-quarters of IT budgets are consumed in route maintenance and upkeep, as opposed to innovation. That thinking bears out in these findings as well. For example, the greatest challenge insurance IT executives face over the next year or two is not identifying and building systems for new initiatives such as mobile apps or business intelligence. Rather, the greatest level of concern, cited by 31 percent of respondents, is modernizing their existing IT infrastructure. By comparison, only 13 percent and 11 percent, respectively, had mobility or BI projects on their tables.
The state of their current IT systems are holding a majority of respondents back from offering faster, more efficient service (61 percent), and greater self-service options (52 percent). Almost a third, 31 percent, of respondents say they would introduce new products quarterly if technology limitations were not holding them back, and 23 percent indicate that annual releases would be their ideal.
I recently had the experience of attempting to change my 18-year-old daughter's status on my existing auto insurance carrier's policy after purchasing a new car and giving her the older one to commute to college. The quote that came back was horrendous, more than three times our current rate. The contact center representatives did not seem to know why the rates were suddenly soaring. After three phone calls and threatening to move to another carrier, a representative with our provider (from whom we've always received good service in the past) finally figured out that our 15-year account was in the “old system,” and by moving our records to the “new system,” we were eligible for a range of discounts, which brought us in line with competitive quotes.
If our carrier had a well-integrated, modern system, would all this back-and-forth have been necessary? I wonder. How many customers is our carrier losing as a result of the “old system” spitting out outrageous quotes? I wonder about that, too.
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.
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