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This put up is a part of a collection sponsored by AgentSync.
The Southwest Airways disaster that rounded out 2022 might have been a nightmare for everybody concerned, however there was one constructive 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The debacle helped begin a bigger dialog on a subject we’ve been speaking about for fairly a while now: the issue with outdated expertise. As we start the brand new yr, we anticipate professionals throughout all industries taking a more in-depth have a look at the cracks of their technological infrastructure and legacy methods.
Legacy expertise and the insurance coverage business usually go hand in hand
The insurance coverage business isn’t any stranger to outdated expertise. 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 mainly compelled to replace their processes and softwares so as to proceed working underneath new security pointers.
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 previous approach of doing issues. Why is that?
The reply isn’t easy. Some could also be fearful about the fee whereas others are extra involved with the problem of changing legacy methods. Some are simply afraid the change can 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 Nevertheless, if Southwest’s breakdown taught us something, it’s that no excuse is value risking the injury that outdated expertise could cause to your group, workers, and prospects.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(as that’s our experience), however many of those issues apply to companies in any business that also depend on outdated expertise.
1. Legacy expertise is cost-heavy
One of many extra frequent roadblocks we hear from insurance coverage specialists who’re nonetheless operating their enterprise on outdated methods is {that a} new answer is simply not within the funds.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 value of sustaining legacy methods. Selecting to maintain doing issues the way in which you’ve at all times executed them as a result of it appears simpler (or cheaper) now is called technical debt. And like most money owed, they ultimately come due.
The older methods get, the extra they value to keep up. Plus, legacy expertise might 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) won’t have the ability to supply the options or ease of use that workers, producers, shoppers, and downstream distribution channel companions are searching for. If these prospects, workers, and companions aren’t glad with their experiences, they might take their enterprise (and their expertise) elsewhere, looking for a extra fashionable expertise.
2. Legacy expertise can hurt your popularity
You’re employed laborious to keep up a constructive popularity in your insurance coverage enterprise. A poor popularity may lead your shoppers straight into the palms of your rivals and negatively influence your backside line. We noticed first hand how outdated expertise managed to pull Southwest Airways’ popularity via the mud in a matter of days.
Relating to insurance coverage, there doesn’t essentially should be an enormous breakdown or error along with your legacy system to negatively influence how present and potential prospects and workers view your organization. It may also be the day-in-day-out tedium of outdated expertise that lastly will get to folks. For those who proceed utilizing legacy expertise, workers, prospects, and shoppers might view your organization as being behind the occasions. And in case your technological infrastructure seems to be prefer it’s caught previously you’ll have a tougher time convincing anybody of your future spot out there.
3. Legacy expertise might get you in regulatory bother
A serious downside of legacy expertise is its lack of ability to combine with newer software program. Insurance coverage professionals want methods that may talk with one another and paint an entire image of their information so as to make knowledgeable enterprise selections. The complexity of the insurance coverage business’s state-by-state regulation system means it’s essential for all methods to be built-in and up to date in actual time to keep away from compliance violations.
Updating to an automatic built-in compliance answer (like AgentSync) can create important compliance administration value financial savings and guarantee steady producer and company compliance – with out the guide effort that you just’d want to make sure the identical stage of compliance in the present day.
4. Legacy expertise can inhibit development at your company, provider, or MGA/MGU
Legacy methods are not often scalable. Fashionable issues want fashionable options and legacy expertise is usually unequipped to deal with present wants. Due to this, legacy methods could be a main barrier to a company’s development and innovation.
The longer an company waits to replace its legacy methods, the tougher will probably be to deal with present market wants and achieve new market share. For those who’re not able to fully overhaul your group’s legacy methods, there are different choices that may provide help to dip your foot within the pool of innovation.
5. Legacy expertise fuels inefficient workflows
Legacy methods can block your group from realizing its full potential. With outdated expertise, it’s seemingly your workers is spending an excessive amount of time on guide, repetitive, and non-revenue-generating duties. Not solely is that this a waste of expertise, however it 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 methods don’t often combine simply with different expertise? This lack of communication can create information and workflow silos that block data from flowing between groups and finally decelerate processes.
6. Legacy expertise might make you extra susceptible to cyber assaults
Hackers are consistently discovering new methods to sneak previous a company’s cyber safety measures and entry its safe information. As software program ages, it could not have the defenses wanted to guard towards newer cyber threats. Cyber safety is a giant concern for insurance coverage companies and carriers which regularly retailer huge quantities of delicate shopper data. Outdated software program might make that information extra susceptible to a knowledge breach, bringing you proper again to earlier factors about reputational hurt and laborious greenback prices.
7. Legacy expertise might negatively influence hiring efforts
We’ve stated 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 wish to work. And in the event you assume the possibility to work with software program that predates their grandmother is an efficient promoting level then oh boy do we’ve information for you.
At this time’s job-seekers are searching for fashionable firms which can be utilizing the newest expertise to enhance each the client and worker expertise. Providing producers a high-tech expertise with much less time spent on guide, repetitive, time-consuming duties might assist as you proceed to compete for expertise.
The time to modernize your insurtech is now!
The very best 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 could have beforehand held concerning your legacy methods. In actuality, it’s significantly 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 expertise can do much more hurt than good with regards to your company, provider, or MGA.
Don’t be like Southwest and wait till the injury is already executed. The time has come to throw out your legacy methods together with the issues they’re inflicting your insurance coverage enterprise. For those who’re able to declare your independence from outdated tech and processes see how AgentSync may also help you attain your full potential.
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