The digital transformation of insurance business drives the need to replace legacy IT systems. While many industries have embraced standard software packages over the past decade, the adoption of standardized software was much slower in the insurance industry which continues to rely heavily on proprietary systems. But not for much longer.
Over the last three years, we’ve spoken to many C-level executives responsible for the digital transformation of their companies. One of the changes we noticed was their interest in industry best practices they could implement as part of their modernization initiatives. The key thing we’ve learned was that these organizations are willing to adapt their processes, provided that out-of-the-box insurance software delivers clear benefits — faster implementation time and lower maintenance cost.
As the attitude towards the insurance software changed, so did the role of IT providers. Once the tailors of products and processes, IT providers evolved from a good listener to a trusted advisor during the project scoping phase and from a custom solution provider to a Partner that provides industry best practices through software.
One of the factors that helped shift this attitude is the emergence of more uniform core systems and platforms. Standardization also became one of the main guidelines we have set for ourselves as we work on the new generation of our AdInsure platform.
The term applies to systems that cover a clearly defined scope in a uniform, proven and widely accepted manner, are open, ready to integrate and available for purchase as ready-made products and platforms. An example would be the SAP ERP. The exact opposite is custom software, developed specifically for a single customer or company with poor integration capabilities.
AdInsure architecture allows clients a great degree of flexibility. Its standardized functionality can be adapted by clients to suit their business needs perfectly. Even if insurers heavily modify a product or a process, they may jump-start the existing ones and then adjust the processes during operations. What is the major benefit of this? The insurers now have options — they can either choose a standard solution for a really quick implementation or they can opt for something more tailored to their needs. In both cases, they benefit from upgrades and updates.
Ease of change allows insurers to build their own standards, share them within their teams or even groups across borders.
Digitization of processes plays a key part in the transformation of the industry and drives the need to replace legacy IT systems. We believe more insurers will choose standard insurance software solutions over custom-built systems due to many benefits they bring: faster implementation, higher productivity, lower risk using proven technology, built-in industry knowledge and experience, and, finally, the ability to future-proof their solutions through continuous updates.
A standard insurance platform is a technology that’s available for purchase as a ready-made platform. It is built on industry best practices and standards rather than customized for a specific client or a company. It has broad integration capabilities and is often the fastest and the least risky way to modernize core insurance systems.
The key advantages of standards software are lower risk, faster implementation, higher productivity, built-in industry knowledge, continuous updates, speed to market and overall optimised business performance.
According to Mckinsey, 75% of top insurers in North America, CEE, the Nordics and the UK choose standard software for claims and policy administration.