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This put up is a part of a collection sponsored by AgentSync.
The Southwest Airways catastrophe that rounded out 2022 could have been a nightmare for everybody concerned, however there was one optimistic that got here out of it. The debacle helped begin a bigger dialog on a subject we’ve been speaking about for fairly a while now: the issue with outdated know-how. As we start the brand new yr, we anticipate professionals throughout all industries taking a more in-depth take a look at the cracks of their technological infrastructure and legacy techniques.
Legacy know-how and the insurance coverage business typically go hand in hand
The insurance coverage business is not any stranger to outdated know-how. As a legacy business, legacy tech is par for the course. It wasn’t till the COVID-19 pandemic started inflicting enterprise shutdowns that many insurers had been principally compelled to replace their processes and softwares in an effort to proceed working beneath new security tips.
In some ways, the COVID-19 pandemic was the catalyst for the insurance coverage business’s digital revolution. However, numerous carriers and companies are nonetheless counting on the outdated means of doing issues. Why is that?
The reply isn’t easy. Some could also be frightened about the price whereas others are extra involved with the problem of changing legacy techniques. Some are simply afraid the change shall be an excessive amount of for workers and that it’ll trigger extra enterprise disruption than it’s value. Nevertheless, if Southwest’s breakdown taught us something, it’s that no excuse is value risking the harm that outdated know-how could cause to your group, staff, and prospects.
So, with out additional ado, listed below are seven methods your legacy system could also be inflicting your insurance coverage enterprise extra hurt than good.
**We’ll be exploring these issues from an insurance coverage perspective (as that’s our experience), however many of those issues apply to companies in any business that also depend on outdated know-how.
1. Legacy know-how is cost-heavy
One of many extra widespread roadblocks we hear from insurance coverage consultants who're nonetheless operating their enterprise on outdated techniques is {that a} new resolution is simply not within the funds. Whereas it’s true that the upfront prices of including extra fashionable instruments to your tech stack could also be substantial, they’re nothing in comparison with the cost of maintaining legacy systems. Selecting to maintain doing issues the best way you’ve at all times achieved them as a result of it appears simpler (or cheaper) now is named technical debt. And like most money owed, they ultimately come due.
The older techniques get, the extra they value to take care of. Plus, legacy know-how could possibly be consuming away at an organizations’ backside line in different, much less apparent methods. For instance, an outdated company administration system (AMS) or buyer relationship administration system (CRM) may not have the ability to provide the options or ease of use that staff, producers, shoppers, and downstream distribution channel companions are searching for. If these prospects, staff, and companions aren’t glad with their experiences, they could take their enterprise (and their expertise) elsewhere, in quest of a extra fashionable expertise.
2. Legacy know-how can hurt your fame
You're employed laborious to take care of a optimistic fame on your insurance coverage enterprise. A poor fame could lead on your shoppers straight into the arms of your opponents and negatively affect your backside line. We noticed first hand how outdated know-how managed to tug Southwest Airways’ reputation by way of the mud in a matter of days.
In terms of insurance coverage, there doesn’t essentially should be a large breakdown or error along with your legacy system to negatively affect how present and potential prospects and staff view your organization. It may also be the day-in-day-out tedium of outdated know-how that lastly will get to individuals. When you proceed utilizing legacy know-how, staff, prospects, and shoppers could view your organization as being behind the instances. And in case your technological infrastructure appears to be like prefer it’s caught up to now you’ll have a tougher time convincing anybody of your future spot out there.
3. Legacy know-how might get you in regulatory hassle
A significant downside of legacy know-how is its incapability to combine with newer software program. Insurance coverage professionals want techniques that may talk with one another and paint an entire image of their knowledge in an effort to make knowledgeable enterprise selections. The complexity of the insurance coverage business’s state-by-state regulation system means it’s essential for all techniques to be built-in and up to date in actual time to keep away from compliance violations.
Updating to an automatic built-in compliance resolution (like AgentSync) can create vital compliance administration value financial savings and guarantee steady producer and company compliance – with out the handbook effort that you just’d want to make sure the identical stage of compliance at the moment.
4. Legacy know-how can inhibit progress at your company, provider, or MGA/MGU
Legacy techniques are hardly ever scalable. Fashionable issues want fashionable options and legacy know-how is usually unequipped to deal with present wants. Due to this, legacy techniques is usually a main barrier to a corporation’s progress and innovation.
The longer an company waits to replace its legacy techniques, the tougher it is going to be to deal with present market wants and achieve new market share. When you’re not able to fully overhaul your group’s legacy techniques, there are different choices that may enable you to dip your foot within the pool of innovation.
5. Legacy know-how fuels inefficient workflows
Legacy techniques can block your group from realizing its full potential. With outdated know-how, it’s possible your employees is spending an excessive amount of time on handbook, repetitive, and non-revenue-generating duties. Not solely is that this a waste of expertise, but it surely additionally will increase the possibility of human error and non-compliance.
With out up to date insurtech, processes like producer onboarding and compliance administration eat up much more time and assets. Bear in mind earlier after we talked about that legacy techniques don’t often combine simply with different know-how? This lack of communication can create data and workflow silos that block data from flowing between groups and finally decelerate processes.
6. Legacy know-how might make you extra susceptible to cyber assaults
Hackers are always discovering new methods to sneak previous a corporation’s cyber safety measures and entry its safe knowledge. As software program ages, it could not have the defenses wanted to guard in opposition to newer cyber threats. Cyber safety is a giant concern for insurance coverage companies and carriers which frequently retailer huge quantities of delicate shopper data. Outdated software program might make that knowledge extra susceptible to an information breach, bringing you proper again to earlier factors about reputational hurt and laborious greenback prices.
7. Legacy know-how might negatively affect hiring efforts
We’ve mentioned it earlier than and we’ll say it once more – the insurance coverage business is within the midst of a hiring disaster. Mass retirement and a shrinking expertise pool means high-quality candidates have extra energy to decide on the place they’d prefer to work. And if you happen to suppose the possibility to work with software program that predates their grandmother is an effective promoting level then oh boy do we've got information for you.
Right now’s job-seekers are searching for fashionable corporations which might be utilizing the newest know-how to enhance each the shopper and worker expertise. Providing producers a high-tech expertise with much less time spent on handbook, repetitive, time-consuming duties might assist as you proceed to compete for expertise.
The time to modernize your insurtech is now!
The most effective by date in your insurtech has come and gone and it’s time to rethink the “if it ain’t broke, don’t repair it” mindset you will have beforehand held concerning your legacy techniques. In actuality, it’s a lot better to repair the issue earlier than a significant malfunction (once more, you simply have to have a look at Southwest Airways for proof). Clearly, outdated know-how can do much more hurt than good on the subject of your company, provider, or MGA.
Don’t be like Southwest and wait till the harm is already achieved. The time has come to throw out your legacy techniques together with the issues they’re inflicting your insurance coverage enterprise. When you’re able to declare your independence from outdated tech and processes see how AgentSync will help you attain your full potential.
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