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7 Methods Legacy Insurance coverage Know-how Could Be Holding you Again

This put up is a part of a collection sponsored by AgentSync.

The Southwest Airways disaster 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The debacle helped begin a bigger dialog on a subject we’ve been speaking about for fairly a while now: the issue with outdated expertise. As we start the brand new 12 months, 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 trade usually go hand in hand

The insurance coverage trade isn’t any stranger to outdated expertise. As a legacy trade, legacy tech is par for the course. It wasn’t till the COVID-19 pandemic started inflicting enterprise shutdowns that many insurers have been mainly pressured to replace their processes and softwares with a purpose to proceed working underneath new security pointers.

In some ways, the COVID-19 pandemic was the catalyst for the insurance coverage trade’s digital revolution. However, numerous carriers and businesses are nonetheless counting on the outdated means of doing issues. Why is that?

The reply isn’t simple. Some could also be nervous 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 price. Nevertheless, if Southwest’s breakdown taught us something, it’s that no excuse is price risking the harm that outdated expertise may cause to your group, staff, and prospects.

So, with out additional ado, listed here 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(as that’s our experience), however many of those issues apply to companies in any trade that also depend on outdated expertise.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extra frequent roadblocks we hear from insurance coverage specialists who’re nonetheless operating their enterprise on outdated methods is {that a} new resolution is simply not within the finances. Whereas it’s true that the upfront prices of including extra trendy 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 best way you’ve all the time performed them as a result of it appears simpler (or cheaper) now is called technical debt. And like most money owed, they finally 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) may not have the ability to provide the options or ease of use that staff, producers, purchasers, and downstream distribution channel companions are in search of. If these prospects, staff, and companions aren’t happy with their experiences, they could take their enterprise (and their expertise) elsewhere, searching for a extra trendy expertise.

2. Legacy expertise can hurt your repute

You’re employed exhausting to keep up a optimistic repute to your insurance coverage enterprise. A poor repute could lead on your purchasers straight into the fingers of your opponents and negatively impression your backside line. We noticed first hand how outdated expertise managed to pull Southwest Airways’ repute by the mud in a matter of days.

With regards to insurance coverage, there doesn’t essentially have to be a large breakdown or error along with your legacy system to negatively impression how present and potential prospects and staff view your organization. It may also be the day-in-day-out tedium of outdated expertise that lastly will get to folks. Should you proceed utilizing legacy expertise, staff, prospects, and purchasers could view your organization as being behind the occasions. And in case your technological infrastructure appears prefer it’s caught previously you’ll have a tougher time convincing anybody of your future spot out there.

3. Legacy expertise may get you in regulatory hassle

A significant disadvantage of legacy expertise is its incapacity to combine with newer software program. Insurance coverage professionals want methods that may talk with one another and paint a whole image of their knowledge with a purpose to make knowledgeable enterprise selections. The complexity of the insurance coverage trade’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 resolution (like AgentSync) can create important 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 immediately.

4. Legacy expertise can inhibit development at your company, provider, or MGA/MGU

Legacy methods are hardly ever scalable. Trendy issues want trendy options and legacy expertise is commonly unequipped to deal with present wants. Due to this, legacy methods is usually a main barrier to a company’s development and innovation.

The longer an company waits to replace its legacy methods, the tougher it will likely be to deal with present market wants and achieve new market share. Should you’re not able to fully overhaul your group’s legacy methods, there are different choices that may make it easier 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 doubtless your workers 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 once we talked about that legacy methods don’t normally combine simply with different expertise? This lack of communication can create knowledge and workflow silos that block data from flowing between groups and in the end decelerate processes.

6. Legacy expertise may make you extra susceptible to cyber assaults

Hackers are continuously discovering new methods to sneak previous a company’s cyber safety measures and entry its safe knowledge. As software program ages, it might not have the defenses wanted to guard towards newer cyber threats. Cyber safety is an enormous concern for insurance coverage businesses and carriers which frequently retailer huge quantities of delicate consumer data. Outdated software program may make that knowledge extra susceptible to a knowledge breach, bringing you proper again to earlier factors about reputational hurt and exhausting greenback prices.

7. Legacy expertise may negatively impression hiring efforts

We’ve stated it earlier than and we’ll say it once more – the insurance coverage trade 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 when you suppose the possibility to work with software program that predates their grandmother is an effective promoting level then oh boy do we have now information for you.

At the moment’s job-seekers are in search of trendy corporations which are utilizing the newest expertise to enhance each the client and worker expertise. Providing producers a high-tech expertise with much less time spent on handbook, repetitive, time-consuming duties may assist as you proceed to compete for expertise.

The time to modernize your insurtech is now!

One of the 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 might have beforehand held concerning your legacy methods. In actuality, it’s a lot better to repair the issue earlier than a serious malfunction (once more, you simply have to take 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 harm is already performed. The time has come to throw out your legacy methods together with the issues they’re inflicting your insurance coverage enterprise. Should you’re able to declare your independence from outdated tech and processes see how AgentSync may help you attain your full potential.




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